6JUL

EUA carbon slips back below EUR 81

2 min read

09:40UTC

EU carbon closed EUR 80.14/tonne on 16 July, down 1.26%, giving back part of the 13 July break above EUR 81 that had been its first since February.

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Key takeaway

EUA gave back part of its EUR 81 break, a small offset in the thermal cost stack.

EUA carbon closed EUR 80.14/tonne on 16 July, down 1.26%, drifting back under the EUR 81 line it had broken on 13 July for the first time since February ¹. An EUA is the tradeable permit a generator must surrender for each tonne of CO2 it emits under the EU Emissions Trading System, and it feeds directly into what a gas or coal plant pays to run.

The pullback stayed modest, within about a euro of the break rather than a reversal of it. Carbon slipped in the same window that German power climbed hard, so the two moved apart: one input to the thermal cost stack eased while the demand pulling on that stack intensified. For the spark and dark spreads, a softer EUA trims the marginal cost of running, a small offset against the fuel-and-demand pressure elsewhere in this briefing.

Deep Analysis

In plain English

Companies that burn fossil fuels in the EU have to buy permits, called EUAs, for every tonne of carbon dioxide they emit. That permit price crept above EUR 81 for the first time since February earlier this week, then slipped back to EUR 80.14. It is a small move, but it matters because it is one of the two main costs, alongside the gas price, that decides whether it is cheap or expensive to run a gas power station in Europe.

What could happen next?

Meaning
The retreat under EUR 81 confirms the level is a contested band rather than an established floor, consistent with how the price has behaved since first breaking EUR 80 on 25 June.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: EUA first broke cleanly above EUR 80 on 25 June, settling EUR 80.73 (ID:4557), a level the market has now tested and slipped back under repeatedly, EUR 80.17 on 30 June, EUR 81.35 on 13 July, EUR 80.14 on 16 July, treating EUR 80-81 as a contested band rather than a floor it has actually held.

Counter-parallel: The European Commission's 11 May revision to ETS free-allocation benchmarks (ID:3709) did not touch the supply side of the market, the annual cap still falls by a fixed tonnage each year and Market Stability Reserve withdrawals keep tightening the pool of tradeable permits, so the repeated failure to hold above EUR 81 reads as short-term noise sitting on top of a structural supply squeeze, not evidence that squeeze has eased.

Immediate impact: at EUR 80.14/tonne, the carbon cost feeding German CCGT marginal cost via the roughly 0.52 tCO2/MWh emission factor stays close to where it has sat for weeks, so this week's EUR 156 German day-ahead peak (elsewhere in this briefing) owes to power demand, not a carbon cost spike.

Structural: the EU ETS cap keeps tightening by design, the annual cap falls by a fixed tonnage each year and free allocation to CBAM-covered sectors is being cut 2.5% in 2026 and 5% in 2027, so a short-term drift under EUR 81 sits within the noise of a longer structural uptrend rather than reversing it.

Sources:Trading Economics

Mentions:EUA →EU Emissions Trading System →CCGT →European Commission →

First Reported In

Update #27 · TTF hits EUR 55; the arb won't confirm it

Trading Economics· 16 Jul 2026

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Causes and effects

Caused by

EUA carbon breaks EUR 81 a tonne

EUA gives back part of the 13 July break above EUR 81.

Occurred 13 Jul 2026

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This Event

EUA carbon slips back below EUR 81

Carbon eased off its own breakout even as power surged, loosening one input to the CCGT cost stack.

Different Perspectives

LNG spreads desk

The JKM-TTF arb flipped to a TTF premium of roughly USD 0.6/MMBtu on 15 July, the first time this cycle Europe has outbid Asia, yet no Atlantic cargo has rerouted west. Until a cargo actually moves, the desk reads the Hormuz premium as unconfirmed and the EUR 55 print as vulnerable to a fast reversal.

United States

Washington reimposed a blockade on Iranian ports and a 20% Strait of Hormuz cargo toll on 13 July, driving TTF's 9% two-session rally to EUR 54.995/MWh. The posture is again setting Europe's gas benchmark by sentiment rather than by any confirmed change in cargo flows.

EDF

EDF slipped the Bugey 3, Golfech 2 and Chooz 2 restarts to 19, 22 and 25 July, pushing all three past the 20 July Bugey heat exemption, after river-cooling limits on the Rhone, Garonne and Meuse forced the cuts. The same thermal ceiling has capped the fleet in every major heatwave since 2003, and this cycle is no exception.

German power desk

German day-ahead power climbed from EUR 126 to EUR 156/MWh over 14-16 July as the heat dome held, flipping the clean spark spread positive for the first time since 14 July. Gas-for-power demand is now back in competition with mandate storage injection right as the injection margin itself is thinning.

EU carbon and storage regulators

EUA carbon broke EUR 81/tonne on 13 July as the ETS Market Stability Reserve's scheduled withdrawals met fresh fuel-switching demand from France's nuclear curtailment. Brussels' mandatory storage-fill rule kept German and French injection running regardless of the TTF swings, the mechanism working as designed four years after the 2022 shock.

Equinor

Equinor returned its Asgard field from maintenance on 11 July, lifting Gassco's exit nominations to 319.8 mcm/day just as TTF round-tripped on Hormuz risk. The restart gave Norway spare pipeline capacity to help Europe absorb the gas rally without drawing down storage, reinforcing its role as the post-2022 swing supplier.