EU Carbon Climbs to Highest Since August 2023 on Tighter Supply
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MarketsGiftGiftGift this articleAdd us on GoogleContact us:Provide news feedback or report an errorConfidential tip?Send a tip to our reportersSite feedback:Take our SurveyNew WindowGiftBy Eamon FarhatJanuary 9, 2026 at 8:03 PM GMT+5:30BookmarkSaveTranslateListen1:34European Union carbon futures climbed to the highest since August 2023, heading for a fifth straight weekly gain, amid tightening supply.Benchmark carbon permits rose as much as 1.6% to €89.58 a ton on ICE Endex in London. Reduced auction volumes cleared above prices in the secondary market this week, supporting expectation that allowances will become scarcer this year.Investment funds’ net-long position on carbon is near the highest in data going back to early 2018, ICE data how. The bullish outlook has been bolstered by a looming deficit of allowances due to a tightening emissions cap. From this year, major reforms to the EU’s carbon market include the removal of free emissions allowances for the aviation sector, and stricter rules for shipping, which will support demand.“Options markets show strong conviction for higher prices in early 2026,” said Gregory Idil, a senior carbon broker at BRS Shipbrokers. He added that auction volumes are set to fall by around 20% this year, helping to steadily tighten supplies.Europe's Carbon Benchmark Rise to Highest Since August 2023Carbon futures for delivery in December 2026Source: ICEWhile benchmark European gas prices are headed for a weekly drop, they’re up about 5% from a low set last month. Higher gas prices can encourage a shift toward more emissions-intensive coal generation — something that adds to demand for carbon permits.Carbon permits for December 2026 were up 1.1% at €89.15 a ton, rising for a fourth day.The next target is now the psychological €90 level, said Ingvild Sorhus, EU carbon manager at consultant Veyt.LinkCopy LinkFollow all new stories by Eamon FarhatPlus FollowingPlus Get AlertsPlus Get AlertsXGiftBookmarkSaveContact us:Provide news feedback or report an errorSite feedback:Take our SurveyNew WindowConfidential tip?Send a tip to our reportersBefore it's here, it's on the Bloomberg TerminalBloomberg Terminal LEARN MOREBefore it's here, it's on the Bloomberg TerminalBloomberg Terminal LEARN MORE