3AUG

EUA carbon breaks EUR 81 a tonne

2 min read

10:53UTC

The EU December carbon allowance ran to about EUR 81.35 a tonne by Monday, its highest since February, stacking fresh cost onto gas-fired generation.

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Key takeaway

EU carbon at about EUR 81 a tonne adds fresh pressure on the clean spark spread.

EUA December carbon allowances broke EUR 81/tonne on Monday 13 July for the first time since February, climbing from a flat EUR 79.04 settlement on Friday 10 July to about EUR 81.35 on a market-data snapshot around 13 July ¹. EUA is the EU Emissions Trading System allowance that gas- and coal-fired generators surrender for each tonne of carbon dioxide they burn, so its price feeds straight into the marginal cost of thermal power.

The climb extends an established run rather than opening a new one. EUA first cleared EUR 80 on 25 June and settled EUR 80.17 on 30 June , so the EUR 81 print is the next leg up, not a break from range. Treat the exact 81.35 level with some caution: it rests on a dated snapshot rather than a confirmed exchange settle, while the EUR 79.04 baseline of 10 July is firmer.

With gas firm at the same time, CCGT marginal cost rises from carbon and fuel together, compressing the clean spark spread further just as gas-fired plant picks up the load French nuclear has dropped. The same squeeze showed up on 9 July, when gas and carbon rose together and compressed Germany's clean spark spread rather than the France-Germany spread .

Deep Analysis

In plain English

Carbon allowances are permits that power plants and factories must buy for every tonne of CO2 they emit under the EU's Emissions Trading System. The EU controls how many permits reach the market each year, and factories bid against each other for the shrinking pool. The EU has a rule that automatically pulls spare permits off the market when there is a surplus, which has been squeezing supply for a while. On top of that, the same heatwave that curtailed French nuclear plants (see the FR-DE spread story) is pushing utilities to burn more gas for electricity, and gas-fired power needs more permits. Both effects pushed the price above EUR 81 a tonne for the first time since February.

Deep Analysis

Root Causes

The EU ETS Market Stability Reserve automatically withdraws a share of unallocated allowances from auction whenever the surplus sits above a set threshold, which mechanically shrinks the pool of allowances available to buy even if nothing about underlying emissions changes.

That structural tightening is being amplified by short-term fuel switching: when nuclear output drops (as in the French curtailment) or heat lifts power demand, utilities lean harder on gas-fired generation, and each additional gas-fired megawatt-hour requires more allowances, adding demand on top of the MSR's supply squeeze.

Source Landscape

This story draws on neutral-leaning sources

Primary parallel: EUA traded near or above EUR 100/tonne in early 2023 on a similar combination of MSR-driven supply tightening and gas-for-power fuel switching after the Ukraine invasion cut Russian pipeline flows, showing the mechanism connecting power-market stress to carbon prices is not new.

Counter-parallel: That 2023 peak unwound over the following year as gas prices fell and fuel switching reversed, so a EUR 81 print on its own does not establish a durable floor; the 2023 precedent argues the current level is as likely to prove cyclical as structural.

Consensus view: ClearBlue Markets has pointed to the EU ETS Market Stability Reserve as the mechanical driver behind carbon's grind higher through 2026, arguing that scheduled allowance withdrawals are tightening free float faster than falling industrial demand can loosen it, which is consistent with EUA holding above EUR 80 since 25 June and pushing to EUR 81.35 by 13 July.

Counter-view: IEEFA has argued the MSR story is only half the picture, and that this specific leg higher is fuel-switching demand: the same heat and nuclear-curtailment episode pushing up power prices is forcing more gas-for-power generation, and each extra CCGT hour run buys allowances rather than just reflecting scarcer supply.

Key tension: Whether EUA's break above EUR 81 reflects a structural supply squeeze that persists once the heatwave ends, or a temporary demand spike from summer fuel-switching that reverses once nuclear output normalises.

Sources:Prestige Business Solutions

Mentions:EUA →CCGT →Germany →IEEFA →EU Emissions Trading System →Ukraine →France →

First Reported In

Update #26 · Gas and power decouple as French heat bites

Prestige Business Solutions· 13 Jul 2026

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Causes and effects

Caused by

TTF round-trips back above EUR 50

TTF holding above EUR 50 pushed CCGT marginal cost up alongside carbon, compounding to squeeze the clean spark spread.

Occurred 13 Jul 2026

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Clean spark spread reaches EUR 74

The EUR 81 print extends the EUA run that first broke EUR 80 on 25 June and held EUR 80.17 on 30 June.

Occurred 30 Jun 2026

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This Event

EUA carbon breaks EUR 81 a tonne

Carbon rising alongside gas squeezes the clean spark spread from a second direction just as gas-fired plant covers lost French nuclear.

Led to

EUA carbon slips back below EUR 81

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

Occurred 16 Jul 2026

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Different Perspectives

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

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

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

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)

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 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.