This weeks outlook is bearish. The indefinite suspension of gas flows through Nord Stream 2 raises fears that mandatory curbs to natural gas use will be required this winter, affecting industrial output and emissions. Bullish gas prices will also place further strain on utilities, possibly affecting EUA hedges those companies might have in place. On Tuesday 6 September the European Parliament’s ENVI environment committee will discuss the REPower EU proposal. The prospects for this passing the legislative process have apparently improved recently. Positive news about the proposal to sell approximately 250 million EUAs could prompt a bearish reaction for EUA prices, with one caveat – ENVI may demand that EUAs be removed from the market in future in equal quantity to avoid upsetting the fundamentals of the market. Arguably the MSR does this to an extent anyway. If the market has priced in a more bearish outcome, we could see something of a rally in response to news that the 250 million EUAs will be sold and then eventually be cut from the market. These bearish possibilities come against a backdrop of heavy coal fired power generation. The net impacts of more EUAs coming to market and industrial shutdowns are offset by high energy sector EUA demand, which will need to be hedged eventually. In short term further price losses look possible however.


  • 7.48 million EUAs will be sold this week at auction. A return to full auction volumes, but with no auction on Thursday. Auction volumes build in the next few weeks – see the table of auction volumes below. 
  • Nord Stream outage: Nord Stream is down indefinitely. The Euro suffering as well and the cut to gas supplies looks to be the major story of the week, threatening industrial demand destruction in winter.
  • 6 September – REPower EU talks in European Parliament: MEPs from the environment committee may ask that EUAs be removed from the market in longer term to compensate for any addition of EUAs to the market in the short term. This could generate a relatively bullish market reaction compared with the original concept of selling at least 250 million EUAs on top of the approximately 1.5 billion EUA yearly cap on emissions. Confirmation of an extra 250 million EUAs coming to market in the short term could still pull EUAs lower given the bearish look to the market overall.
  • 8 September – ENVI reports back on status of trilogue negotiations on Fit for 55, and further discussion on REPower EU.
  • 9 September – EU electricity market intervention: On Friday EU Energy ministers will discuss a response to lessen the burden on European power users. This could prompt volatility. Much on an intervention remains uncertain at present.
  • First two weeks of October – Trilogue sessions: we should learn more in a month on Fit for 55, including maritime inclusion in EU ETS.
  • What the politicians are saying: aside from the usual voices calling for a suspension to the EU ETS, some key voices in the EU ETS and European Parliament are arguing that high EUA prices will need to be soothed in the short term. Opposition to REPower EU’s MSR plan is fading and intervening in the carbon price is far easier than intervening in the gas market. In any case, with fuel switching ruled out, a high EUA price does not do much to reduce emissions. ICIS’s Fuel switching price was 414 Euros on Friday (the price an EUA must reach to make gas fired power generation cheaper than coal fired power).

Auction timetable:

Week 36 Week 37 Week 38 Week 39
# EUAs 7,482,500



10,323,000 12,494,500

Outlook: bearish


  • Indicative EUA Price: €74.60
  • YTD Average EUA Price: €84.09
  • August average EUA price: €87.63
  • MTD average EUA Price: €79.34



1 – Dec22 EUA price chart

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