Auction volume: 11.1 million EUAs, 3.4 million more than less week.

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Energy Fundamentals

Carbon markets enter August against a backdrop of seasonally quieter trading, with EU gas storage reaching 57.1%, broadly in line with seasonal expectations. While comfortable inventory levels continue to reduce immediate supply concerns, EUA prices came under pressure last week as traders reduced risk exposure ahead of the summer holiday period. Lower liquidity is likely to amplify short-term price swings, particularly if unexpected geopolitical or policy headlines emerge. Geopolitical tensions remain a key variable, although sentiment improved after President Trump announced that US-Iran talks will resume, prompting a decline in oil prices and easing concerns over potential disruptions in the Strait of Hormuz. At the same time, continued attacks on energy infrastructure in Ukraine and Russia, alongside Black Sea shipping disruptions, remind markets that supply risks have not disappeared entirely. On the demand side, persistent heatwaves across Western Europe continue to support power demand while reducing nuclear generation in both France and Hungary, increasing the reliance on fossil-fired generation. This could provide underlying support for EUA demand if these conditions persist into the coming weeks. Meanwhile, the issuance of Nigeria's first CORSIA-eligible carbon credits highlights the continued expansion of global compliance markets, although the immediate impact on EUAs remains limited.

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Fundamentally, the market remains finely balanced. Comfortable gas storage and easing Middle East tensions may continue to weigh on prices in the near term, while extreme weather, reduced nuclear output and ongoing geopolitical uncertainty provide supportive factors beneath the market. With trading volumes typically declining during August, sentiment is likely to remain headline-driven, making policy and geopolitical developments the primary drivers for EUA price action in the week ahead.

• Gas storage currently sits at 57.1% (August 1st, 2026)
• EUAs erase early advance amid widespread de-risking ahead of peak holiday period
• Nigeria issues first CORSIA-eligible credits as cookstove project receives labels from Verra
• Trump Says Iran Talks to Begin Monday After Scrapping Attack
• Saudi Crown Prince MBS urges Trump to ‘prioritise dialogue’ in US-Iran war
• Oil Slumps as Trump Holds Off Iran Attack, Says Talks to Resume
• Climate change made 'fire-prone' weather conditions more likely in Spain and France, scientists say
• Hungary faces energy crunch as drought shuts down Paks nuclear plant, PM says
• French heat-related nuclear cuts to hit 12% of capacity today
• Crimean families queue for hot meals as Ukraine hits power supply
• Russia steps up protection of Black Sea cargo ships, develops alternative routes

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Investment Funds

• Investment funds increased their net short position to -48.14m EUAs on June 24th of July (vs. -43.12 on July 17th).
• Gross short positions increased to -17.83mln  EUAs (vs.-20.52mln EUAs).
• Gross long positions decreased to +65.97 mln EUAs (vs. +63.64mln  EUAs).

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Market Prices

• Indicative Dec26 EUA Price: € 81.18
• Indicative Spot EUA Price: €80.38
• YTD Spot EUA Price: €76.46
• MTD Spot EUA Price: €80.32

Chart A: EUA Spot (Futures Today) Price (EUR)

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Technical Analysis

December 2026 EUAs remain in a constructive medium-term uptrend despite the recent pullback from the €86.00 area. Price continues to trade above the 50-day Moving Average (€80.11) and 100-day Moving Average (€76.78), confirming that the broader trend remains positive. However, the contract has slipped below the 20-day Moving Average (€80.77) and EMA, suggesting that short-term momentum has weakened. The Bollinger Bands have started to flatten after the recent expansion, suggesting that volatility is easing following the sharp rally in late July. Price is currently trading around the middle of the Bollinger Band, reflecting a more balanced market after profit-taking from recent highs.Momentum indicators have cooled noticeably. The RSI has eased back to around 48, returning to neutral territory after previously approaching overbought conditions. The CCI has fallen below zero, highlighting the recent loss of upside momentum, while the MACD continues to trend lower, although it remains above the zero line, suggesting that the broader trend is still constructive despite weakening short-term momentum.

The broader technical picture remains cautiously constructive, with higher highs and higher lows still intact on the medium-term chart. However, weakening momentum across the RSI, CCI and MACD suggests the recent rally is losing steam, increasing the likelihood of consolidation in the short term. Holding above the €80.11 support region would keep the broader bullish structure intact, while a recovery above €81.50 would improve the technical outlook and shift focus back towards the €85.40 resistance area.

Chart B: December 2026 EUA Price (EUR) - Technical

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