EU ETS Monthly Update - October, 2026
Throughout October 2026, the EUA Dec26 contract remained flat, with prices peaking just above 88 EUR, before settling at 86 EUR towards the end of last week. Interestingly, while Dutch TTF prices surged over 27%, EUA prices remained range-bound over the same period.
EUA prices have experienced significant downward pressure from an official expansion of the Market Stability Reserve - MSR - on the 20th of October, which can now hold up to 700 million allowances in reserve, instead of the previous 400 million threshold. This gives the European Commission significantly more power in case it needs to inject liquidity into the market to combat extreme price volatility or supply tightness. Furthermore, EUA prices have been weakened by expectations of an industrial slowdown across the EU, coupled with milder-than-expected weather throughout the month.
On the other hand, a floor on EUA prices has been supported by ongoing tensions in the Middle East. As this led to elevated natural gas prices, power generators have been switching to coal, increasing their total emissions and driving EUA demand upwards.
Looking ahead, there is a possibility that EUA prices will close the gap with Dutch TTF and continue moving in an upward trajectory. As energy prices stay elevated, EUA demand might be strengthened by increased coal adoption going into the winter period. However, mild weather and slow industrial production across Europe could potentially keep prices flat throughout November.
From a technical perspective, the Dec26 EUA contract seems to be moving toward the 100% Fibonacci level at 88.34 EUR. If that level is reached, the next key level to watch is the previous high at 93.40 EUR, which should act as a significant point of resistance. If broken, the price could move on to test the 100 EUR psychological level, driven by strong upwards momentum. If prices move lower, a key level to watch is the 78.6% Fibonacci level at 82.94 EUR, which also coincides with the lower end of the Bollinger Bands.
Fig.1 Techincal Analsis
