Skip to content
Welcome, thoughtbot's Giant Robots listeners!Start here
Drones: Industry & Defence
26OCT

Carbon sits still as gas and power dive

2 min read
15:07UTC

EUA December-2026 allowances closed at €83.51/tonne on 27 July against €83.40 on the 24th, a move of 0.01 per cent, through the sharpest four sessions of the cycle.

TechnologyDeveloping
Key takeaway

Carbon moved a hundredth of a per cent while gas and power collapsed around it.

EUA December-2026 carbon allowances closed at €83.51/tonne on Monday 27 July against €83.40 on Friday the 24th, a change of 0.01 per cent.⁠1⁠2 Both prints are aggregator quotes on the EEX December-2026 contract rather than exchange settlement prints, and the aggregators disagree with each other: one secondary report gave €83.88 for the 24 July session, another a €80.01 to €81.07 range for the same day.⁠3 The two dedicated data services agree; the rest do not. Carbon has been range-bound for a fortnight, having drifted back under €81 in mid-July before recovering.

Hold that still print against what the other two spark inputs did across the identical four sessions. Gas handed back the war premium it had built on Gulf risk. German power lost more than two fifths of its value on a wind surge. Carbon moved by a hundredth of a per cent. This desk asked last week whether the carbon leg might ease the pressure on the spark. It did not, and it did not add to it either.

That flatness is doing analytical work. A single de-escalation trade would have pulled carbon with it, because a cheaper-gas world implies more coal-to-gas switching and firmer allowance demand at the margin. Carbon not moving says the market did not process the week as one story. It processed a geopolitical unwind in the fuel leg and a weather event in the revenue leg, and it correctly declined to price either as a change in Europe's emissions trajectory. For anyone modelling the spark, carbon is the input that has held still through every shock this cycle, which makes it the one whose eventual move will not be priced in advance.

Deep Analysis

In plain English

Companies that burn fossil fuels in Europe have to buy a permit for every tonne of carbon dioxide they release. The price of that permit, called EUA carbon, barely moved this week even though the price of gas and the price of electricity both swung hard. That is because the carbon permit market runs on its own separate calendar, tied to European Union rules about how many permits exist each year, not to the day-to-day news that moves gas and power prices.

Deep Analysis
Root Causes

EUA's own supply schedule, auction calendars and free-allocation cuts, is fixed months in advance, so the price only moves on new regulatory news rather than on daily gas or power prints; that is a structurally different price-formation process from TTF, which reacts to real-time flow data and geopolitical risk.

With no cap revision, auction change or CBAM announcement landing in this four-session window, carbon had no input to react to, which is why it held flat while two inputs that do react to daily news, gas and power, moved 8 and 41 per cent respectively.

What could happen next?
  • Meaning

    Carbon's inertia through both directions of this week's gas and power swing shows the ETS cap, not fuel news, is currently the dominant input on the allowance price.

First Reported In

Update #30 · Wind, not peace, sank the German spark

TradingEconomics· 27 Jul 2026
Read original →
Causes and effects
This Event
Carbon sits still as gas and power dive
Carbon holding flat while both other spark inputs collapsed is the cleanest evidence that two separate shocks hit, not one de-escalation trade.
Different Perspectives
Nigerian Air Force
Nigerian Air Force
The air force listed 12 Turkish Aksungur and two Chinese CH-4D armed drones on 25 October. No contract has been published, so these are plans.
Civilians in Western Sahara
Civilians in Western Sahara
A UN report of October 2023 records allegations of Moroccan drone strikes east of the berm. An aerial strike there in November 2022 reportedly killed six civilians, the UN said, citing Polisario and local media.
Thunder Tiger
Thunder Tiger
The Taichung company said on 16 October that all 1,520 of its Gauntlet I attack drones passed inspection. Its MoU with AeroVironment covers fitting Switchblade to its uncrewed boats and ground vehicles and exploring joint production in Taiwan.
EDGE Group
EDGE Group
The Emirati group said on 9 October it will supply glide bombs and guidance kits for the Royal Moroccan Air Force's armed drones. A separate memorandum explores making small arms and aero engines in Morocco.
Rajnath Singh
Rajnath Singh
India's Defence Acquisition Council, which he chairs, approved about Rs 2.12 lakh crore of proposals on 26 October, including kamikaze drones and tank-mounted counter-drone systems. About 82 per cent of the value is to go to Indian industry, by the ministry's account.
Kongsberg
Kongsberg
The Norwegian group said on 13 October it will invest more than 200m zlotys in a Pomeranian plant to build and maintain SAN counter-drone systems. It expects series output to begin in the first half of 2028.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.