Auction volume: 10.59 million EUAs, 1.36 more than last week.

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Energy Fundamentals

The fundamental backdrop for EUA prices remains balanced but with a modestly supportive undertone. European gas storage has increased to 40.1%, continuing the seasonal refill trend and helping to ease immediate concerns around winter preparedness. On its own, stronger storage levels would typically reduce upward pressure on both gas and carbon markets. However, this effect is being offset by persistent geopolitical uncertainty and evolving supply dynamics. Tensions surrounding Iran remain a key driver of energy market sentiment. Reports that the Trump administration has hardened its stance on a potential deal with Iran, combined with growing mistrust between both sides, have kept uncertainty elevated. This has been reflected in oil prices recovering from recent lows and renewed concerns over energy transit after attacks on ships in the Strait of Hormuz. Continued disruptions or escalation in the region could support energy prices and, by extension, provide indirect support for EUA prices through higher generation costs and increased hedging activity. From a carbon market perspective, the most notable development is the confirmation that the Market Stability Reserve will withdraw another 190.5 million allowances from the EU ETS starting in September 2026. This represents a meaningful tightening of future allowance supply and reinforces the longer-term scarcity narrative underpinning the carbon market. While the impact will not be immediate, it continues to support expectations of a tighter market balance later in the year. Meanwhile, geopolitical risks remain elevated beyond the Middle East. Ukrainian drone strikes on Russian energy infrastructure highlight the ongoing vulnerability of European energy supply chains, while the US decision to roll back climate-related disclosure requirements signals a potentially softer regulatory stance internationally. However, these developments are likely to have a more limited direct impact on EUA pricing than the combination of energy security concerns and the upcoming reduction in allowance supply.

Overall, rising storage levels provide a modest bearish counterweight, but ongoing geopolitical risks and the confirmed tightening of ETS supply leave the near-term outlook mildly constructive for EUA prices. The market remains highly sensitive to energy-related headlines, with supply security and carbon market fundamentals continuing to provide underlying support.

• Gas storage currently sits at 40.1% (May 30th, 2026)
• Trump tightens terms on Iran war deal, US media say
• Mistrust between US, Iran grows as diplomatic efforts continue
• EU’s Market Stability Reserve To Withdraw Another 190.5 Mln Allowances From ETS Starting Sep. 2026
• Oil Rises From Six-Week Low Amid Uncertainty Over Us-Iran Deal
• Ships Attacked In Strait Of Hormuz This Week, Chevron Says
• SEC Moves To Scrap Biden-Era Rule On Climate Risk Disclosures
• Ukrainian drones hit pipeline, refinery, fuel depot in overnight strikes on Russia

Investment Funds

• Investment funds decreased their net long position to +39.09m EUAs on May 22nd (vs. +40.7 EUAs on May 15th).
• Gross short positions decreased to -23.08m  EUAs (vs. -22.18m EUAs).
• Gross long positions stayed almost the same at 62.17 mln EUAs (vs. 62.88m  EUAs).
  

Market Prices

• Indicative Dec26 EUA Price: €
• Indicative Spot EUA Price: €
• YTD Spot EUA Price: €75.28
• MTD Spot EUA Price: €74.94

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

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Technical Analysis

Technically, EUAs have extended their topside breakout with high velocity, with the Dec-26 contract decisively clearing major macro resistance to trade around the EUR 79.39 level. This continuation move follows a clean violation of both the 100-day moving average and the 50% Fibonacci retracement level, signaling a comprehensive structural shift toward an aggressive bullish regime.

The EUR 78.33 level, which previously served as a major overhead barrier, has now transitioned into immediate structural support alongside the EUR 77.81 zone. Momentum indicators confirm this accelerating strength; the MACD lines are widening their bullish divergence well above the zero line with robust green histogram bars, while the RSI has climbed to 67, indicating absolute buyer control with clear running room remaining before encountering true overbought exhaustion.

From a purely technical perspective, the market is currently expanding directly along the upper Bollinger Band, drawing a clear path toward the next major liquidity cluster. The primary upside target remains the heavy overhead resistance at the 61.8% Fibonacci retracement level near EUR 81.90. Conversely, any brief profit-taking pullbacks are expected to find firm baseline demand near the newly established EUR 77.81 to EUR 78.33 support pivot.

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

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AFS ENERGY B.V.

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