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3AUG

Carbon sits still as gas and power dive

2 min read
10:53UTC

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
Cross-border power traders
Cross-border power traders
The France-Germany day-ahead spread flipped from a EUR 17.20 German premium on 1 August to a EUR 4.15 French premium on 3 August, the same day French curtailment peaked. They cannot yet attribute the flip to curtailment alone, since a like-for-like overnight comparison shows French nuclear output rising while wind fell and demand returned on the weekday step.
EDF
EDF
River-cooling limits took 7.6 GW, 12 per cent of its fleet, offline on 3 August, the highest curtailment since the heatwave began, with an easing forecast to 4.3 GW on 4 August and 3 GW after. It manages the cut as a recurring seasonal constraint, expecting it to lift with river temperature, not repair.
Gasunie
Gasunie
TTF, the Dutch hub it operates, drifted to roughly EUR 55 to 58 per MWh across the window, staying inside its recent range through both the German spark reversal and the French curtailment. It reads a flat hub price as evidence that neither event this window carried enough weight to move the fuel leg on its own.
German gas-fired generators
German gas-fired generators
Record German solar of 18,761 MW on 2 August pushed the clean spark spread to minus 18.48 EUR/MWh, a loss-making day, before it returned to plus 16.20 on 3 August. They now price dispatch against post-solar residual load rather than wind alone, since the sign flipped inside 48 hours on unchanged fuel and carbon costs.
European Commission (DG Energy)
European Commission (DG Energy)
Its implementing-measures register logged transposition notices from only Portugal and Slovakia against Wednesday's Article 94 deadline for Directive (EU) 2024/1788, with 25 states silent. It expects the register to fill only gradually, since filing routinely lags legislating and any infringement track against non-notifying states runs on a slower clock than the deadline itself.
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.