Previous Week Events:

In the previous week, EUAs registered an 0.8% decline on Friday and a 1.6% weekly loss. This was due to renewed fears for a possible US-China trade war and the US announcing a new 50% tariffs on steel and aluminum.

Looking ahead, the market is likely to follow the peace discussions between Ukraine and Russia and react strongly if any kind of progress is achieved. Prices might also react to new tariffs announcement and the evolution of trade discussions between the US and the EU, and China respectively. With the US suggesting the current tariff pause will not be extended, there is a profound sentiment of uncertainty within the market. For this reason, there is a possible scenario that the market will trade sideways until further news confirms its direction.

Auction volume: 11.81million EUAs, 5.32 million more than last week

Energy Fundamentals

• Gas storage sits at 48.8% full on June 1st.
• For 2024, the TNAC stands at 1 148 049 585 allowances. As a result, the MSR will remove 276 million allowances from the auctions between September 2025 and August 2026.
• Russia and Ukraine are having a new series of peace talks today in Istanbul.
• Ukraine hits strategic military targets deep inside Russia in the largest single-day attack since Russia’s invasion began.
• Donald Trump plans to increase steel and aluminum tariffs to 50%.
• US Commerce Secretary Howard Lutnick warns that the tariff pause will not be extended, if trade deals are not reached.
• Right-wind candidate tightly wins Polish election, sparking fear over the country’s commitment to European policy.
• Oil prices rise from geopolitical uncertainty after Ukraine’s attack on Russia.

Investment Funds

• Investment funds reduced their net long position to +17.86m EUAs on May 17th (vs. +16.83m EUAs on May 9th).
• Gross short positions slightly decreased to -40.16m EUAs (vs -40.83m EUAs).
• Gross long positions slightly increased to 58.02m EUAs (vs.  57.66m  EUAs).

Market Prices:

• Indicative Dec25 EUA Price: €71.70
• Indicative Spot EUA Price: €70.77
• YTD Spot EUA Price: €70.95
• MTD Spot EUA Price: €70.15

Chart A: December 2025 EUA Price (EUR)

Technical Analysis

From a technical perspective, the Dec25 EUA contract is currently trading between the Fibonacci 23.6% level at €71.48 and the Fibonacci 38.2% level at €69.33. The price is currently below its 20-day moving average (MA20) at €71.69 and the 100-day moving average (MA100) at €72.25 but remains above the 50-day moving average (MA50) at €68.57. The MACD is in neutral territory and trending towards negative, suggesting potential for further downside. Similar weakening signals are observed in the CCI and RSI. If the price breaks below the Fibonacci 38.2% level at €69.33, it may first test the MA50 at €68.57, with a possible continuation of the decline towards the Fibonacci 50% level at €67.58.

Chart B: December 2025 EUA Price (EUR) - Technical

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