In June EUAs remained strong, with hot temperatures across Europe driving fossil fuel demand as French nuclear output fell and cooling demand increased. Prices gyrated around €80/t, peaking above €82 as funds built speculative length ahead of the July reform package. The policy uncertainty encouraged volatility as the market remained susceptible to headline risk, whilst geopolitical developments also influenced sentiment, particularly Middle East tensions and uncertainty over shipping through the Strait of Hormuz. Although industrial activity remained weak across parts of Europe, traders judged that tightening long‑term supply would outweigh subdued near‑term demand. The monthly option expiry proved uneventful, and EUAs finished supported at €80.16, down 0.59% from May.
UKAs eased over the month as political uncertainty reared its head again, with Keir Starmer's leadership woes fuelling speculation over both future climate policy and the linking talks anticipated this summer. A key development was the UK ETS Authority's announcement that the 2026 auction calendar would be revised to accommodate maritime emissions from July 2026, reinforcing the Government's commitment to expanding the scope of the UK Emissions Trading Scheme (UK ETS). Sentiment stayed positive despite the fallback in prices, with movements increasingly driven by expectations of tighter long‑term carbon policy and closer alignment with the European market rather than short‑term fundamentals. UKAs closed at £56.66, down 3.55% month‑on‑month.
The California Carbon Allowance (CCA) market continued its upward trajectory in June, with prices supported primarily by favourable policy developments and structural fundamentals rather than near‑term compliance demand. Sentiment strengthened following the successful May California–Québec auction, which cleared comfortably above the 2026 reserve price. A further key development was the announcement by California, Québec and Washington of plans to link their markets from 2027, subject to regulatory approval. The prospect of a larger, more liquid market improved investor sentiment and supported prices by raising expectations for greater efficiency and long‑term demand. CCAs closed at $32.92, up 4.65% from May's close.
The Regional Greenhouse Gas Initiative (RGGI) market closed slightly down, with prices primarily driven by the 72nd quarterly allowance auction, which cleared at a record US$35.00/tCO₂. The stronger outcome reflected robust compliance demand and reinforced market confidence, providing the principal source of support. Sentiment was further buoyed by expectations of higher future demand following Virginia's return to the programme and continued growth in electricity consumption across the region, particularly from expanding data centre capacity. RGGIs finished June at $43.80, down 0.87% month‑on‑month.
The Greenedge Carbon Allowances Absolute Return AMC recorded a ‑0.75% performance for June. Both EUA and UKA prices remain supported by a strong fundamental outlook and short‑term energy demand through summer temperatures. Tempering this is ongoing uncertainty over the EU ETS reform package due in July, and political uncertainty in the UK which challenges the linking narrative. In the US, CCAs have continued their recovery as policy issues subside, whilst RGGIs are supported by both robust fundamentals and investor demand, as evidenced by the record quarterly auction result.
