EUA prices posted a modest gain in July, trading sideways early on as participants awaited the EU ETS reforms. On 17 July, the European Commission published proposed amendments to the ETS framework, including a steeper linear reduction factor from 2031, Market Stability Reserve changes aligned to the tighter cap trajectory, and extended but more stringent free allocation. Prices dipped initially but stabilised as the market recognised the proposals face lengthy negotiation and are unlikely to affect near‑term supply. Positioning also improved, with speculative investors rebuilding long positions after earlier liquidation, while compliance demand stayed supportive above €80/t. Sustained European heat added further support, as cooling‑driven power demand coincided with drought conditions that cut French hydro and nuclear availability. EUAs closed July at €81.26, up 1.35% month‑on‑month.
UKA prices posted positive action in July. Early gains tracked EUAs before UKAs began outperforming, supported by domestic politics — the appointment of Andy Burnham as Prime Minister eased concerns over recent political instability. A key structural development was the UK ETS expansion to include domestic maritime emissions from 1 July. To accommodate this, the UK ETS Authority revised the 2026 auction calendar, adding roughly one million allowances — though these don't enter the market until August, limiting immediate impact. Prices retraced late in the month after the EU‑UK summit was pushed from mid‑July to September. UKAs settled July at £59.09, up 4.11% from June.
CCA prices edged lower in July, trading rangebound as the market awaited the rulemaking process and August's Q3 auction. Prices strengthened early in the month as CARB maintained its regulatory timetable and submitted its Final Statement of Reasons (FSOR) to the Office of Administrative Law (OAL) — an important step in California's Program Review, seen positively as reinforcing expectations of greater regulatory clarity. OAL has until 25 August to decide, with CARB targeting 1 September for the new regulations to take effect. Participants continued assessing potential amendments — a lower emissions cap, banking provision changes, and cost‑containment updates. No final decisions came in July, but expectations of a tighter post‑2030 market kept underlying support in place. Early gains were later reversed on Q3‑auction positioning and profit‑taking. CCAs closed at $32.73, up 0.58% from June.
RGGI prices fell sharply in July after an initial bullish rally. Above‑average regional temperatures lifted power demand and pushed prices higher early on, but sentiment turned mid‑month after RGGI Inc announced an additional 3.5 million state set‑aside allowances for the September auction, plus 2.2 million more in December — supply aimed at addressing affordability concerns. No major policy announcements followed, and expectations of tighter future supply kept underlying sentiment supportive. RGGI closed at $38.58, down 13.53% month‑on‑month.
The Greenedge Carbon Allowances Absolute Return AMC recorded a 1.36% performance for July. The EU ETS reform package removed much of Europe's uncertainty, though headline risk persists as details are negotiated. Summer heat added further support for both UKAs and EUAs, while the UK market still offers a compelling linking opportunity now Burnham is Prime Minister. In the US, sentiment remains positive for CCAs and RGGIs as policy reforms continue to support both markets.
