31JUL

EUA carbon slips back below EUR 81

2 min read

09:44UTC

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 , 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 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.

Led to

German gas plants priced out of merit

EUA's EUR 80.14 close on 16 July fed into the same EUR 16 carbon floor that holds marginal cost above power revenue on 20 July.

Occurred 19 Jul 2026

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Spark stays negative, French edge erodes

EUA carbon's 16 July close under EUR 81 gave way to a fresh 22 July high.

Occurred 22 Jul 2026

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Different Perspectives

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

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 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

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 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 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.