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European Energy Markets
31JUL

Carbon sits still as gas and power dive

2 min read
09:44UTC

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

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EconomicDeveloping
Key takeaway

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

EUA December-2026 carbon allowances closed at EUR 83.51/tonne on Monday 27 July against EUR 83.40 on Friday the 24th, a change of 0.01 per cent. 1 2 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 EUR 83.88 for the 24 July session, another a EUR 80.01 to EUR 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 EUR 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.

Sources:TradingEconomics·Investing.com·Prestige Business Solutions
Mentions:EUA →EEX →TTF →European Union →
First Reported In

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

TradingEconomics· 27 Jul 2026
Read original →
Causes and effects
Caused by
Spark stays negative, French edge erodes
TTF and EUA rose together on 22 July (ID:5233); by 27 July gas and power had both reversed sharply while carbon alone held flat, splitting the prior joint move.
Occurred 22 Jul 2026
Read story →
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
Spain's LNG terminal operators
Spain's LNG terminal operators
Spain's 9,145 GWh terminal inventory is the largest single stock in the EU LNG network, an option value that can reroute cargoes wherever the winter strip pays best rather than a cavern gas obligation tied to a fixed date. That flexibility matters more as Germany's cavern shortfall pushes more of the winter security question onto import infrastructure.
European Commission
European Commission
Brussels holds the bloc to 90% on a flexible window while Germany, holding roughly a quarter of EU storage capacity, tracks toward missing its own lower 80% figure by 21 points. A national shortfall this size in the anchor market matters more to bloc security than the flexible timetable alone can absorb.
French power exporters and CRE
French power exporters and CRE
French day-ahead rose in step with Germany but by less, reopening a EUR 7-17 premium that makes northward export flows commercially attractive again after the EUR 43.09 discount evaporated in days. CRE separately authorised RTE and Enedis to buy flexibility locally, betting the coming winter's binding constraint is grid congestion rather than a shortage of firm capacity.
TTF trading desk
TTF trading desk
A visible national shortfall like Germany's 21-point gap is a directional signal, not noise, for a desk holding the summer-winter spread. TTF's flat EUR 58-60 range through this week's German price swings says the market has not yet chosen to reprice refill risk into the front of the curve.
German cavern and CCGT operators
German cavern and CCGT operators
German caverns kept buying prompt gas at TTF near EUR 58-60 through the inversion; the wind collapse to 2.4 GW then flipped the spark spread to plus EUR 29 and put turbines back in the same queue. Every day turbines win that bid, injection at a third of the 877 GWh/day pace needed falls further behind.
Slovakia
Slovakia
Slovakia says it dropped its hold-out on the 21st sanctions package only after Ursula von der Leyen personally signed written gas-price and supply guarantees. The Council of the European Union's own 17,238-character release on the package names neither Slovakia nor any guarantee, leaving Bratislava's account unconfirmed by the institutional record.