FX.co ★ EU Carbon Prices Rise to 6-Week High

EU carbon permit prices climbed to €73.8 per ton, the highest level in six weeks, after the European Commission signaled a more cautious stance on overhauling the bloc’s emissions trading system, easing concerns about heavy-handed intervention. Prices found support when Brussels proposed changes to the Market Stability Reserve that would end the automatic invalidation of certain permits, effectively allowing more allowances to be carried forward for possible future use while keeping core supply controls intact. The proposal indicates that policymakers are seeking to curb volatility without immediately releasing large volumes of additional supply into the market—a less bearish outcome than many traders had anticipated. Carbon prices have also been bolstered by broader energy market tensions stemming from the conflict in the Middle East, which has driven up energy costs and intensified worries about Europe’s industrial competitiveness, underscoring the central role of carbon pricing in the region’s energy mix.