The EU carbon market is reacting to higher gas prices that have made coal-fired generation cheaper, pushing up demand for EU allowances. The Dec 2026 EUA contract rose to EUR84, with a wider forecast range for 2026 at EUR60-95. The market is also waiting for the EU ETS reform, which extends CBAM and free allocation to 2028. The European Commission is revising default values and working on verifier accreditation, which could let importers use actual emissions data. For anyone tracking carbon markets, this article explains how geopolitics in the Strait of Hormuz is moving gas and coal prices, and why that matters for EUA prices. It also notes the UKA contract is less affected. The reform's short-term positive and long-term negative interpretation is worth keeping in mind as CBAM implementation approaches.
