September Pricing Analysis - Global Compliance Carbon

SUMMARY

European allowances tracked a storage-driven gas rally into a joint peak on September 14, then gave back a sixth of gas's decline, leaving EUA at a $97.98/t average (+3.53% MoM) and a six-month volatility low; a stronger dollar cut EUA's 2.33% euro gain to 0.25% in USD. UKA decoupled twice, widening the EUA-UKA spread to $21.82/t on September 21 before a 5.11% jump on September 29 closed most of the gap. Washington delivered the month's largest repricing, falling 29.55% after the first post-linkage auction cleared $25.06/t below June and compressing the WCA-CCA spread from $21.53/t to $6.50/t. RGGI cleared at a record. In Asia-Pacific, Korean allowances held above KRW30,000 on tighter Phase 4 supply as KAU's new cycle opened higher but undersubscribed, Chinese CEAs eased 2.59% MoM and New Zealand's auction failed again with no bids. Into Q4, the catalysts are European storage, Washington's convergence with California, Korea's offset reference-price reset and New Zealand's December 1 auction.

MARKET ACTIVITY

• Washington Auction #15 (September 2) sold all 6.28m allowances at $39.50/t, $25.06 below the June auction price of $64.56, despite 1.88x cover and compliance entities taking 79.19%; obligated buyers priced Washington supply against the larger California-Québec pool, and traded prices moved down to meet the lower auction level. Regulators added about 6 MMT to past allowance budgets and allowed companies to buy up to 25% of each auction, up from 10%.
• RGGI Auction 73 (September 9) sold 28.5m allowances at a record $37.65/short ton, $2.65 above the June auction price of $35.00, in Virginia's first auction since rejoining. All 1,148,000 reserve allowances were sold, leaving no extra supply to release at the December auction if prices rise; the GX secondary price closed at $42.05 as obligated buyers covered ahead of the December 31 control-period end.
• KAU26's first auction (September 9) cleared 5.73% above August but did not sell out its 2.83m allowances: firmer price, thinner depth.

PRICE ACTION

• EUA averaged $97.98/t (+3.53% MoM) and €85.14/t (+4.31% MoM); open $95.99/t (September 1), close $96.23/t (September 30).
• EUA printed $101.01/t on September 14 and fell 2.84% the next session; implied EUR/USD fell from 1.159 to 1.136 over the month, cutting EUA's 2.33% euro gain to 0.25% in USD.
• UKA averaged $80.03/t (+0.81% MoM) and £59.65/t (+1.74% MoM); high $83.80/t (September 10), low $76.56/t (September 23), close $81.09/t.
• UKA's largest move was +5.11% on September 29 ($77.48/t to $81.44/t), while EUA was flat and TTF fell 6.07%.

EUA weekly

UKA weekly

BLENDED CARBON INDEX (W1=100)

CROSS-MARKET DYNAMICS

• TTF day-ahead averaged €75.75/MWh (+22.75% MoM) as EU storage stood at 67.12% on September 8, the weakest for the time of year since 2009 (Wood Mackenzie); higher gas costs push generation toward coal and lift allowance demand.
• Daily EUA-TTF return correlation rose to 0.45 from -0.07 in August; both peaked on September 14 (EUA €87.45/t, TTF €84.14/MWh).
• From September 14 to September 23, TTF fell 13.48% on easing Hormuz tensions while EUA fell 2.28%; the MSR, withdrawing 190.5m allowances from auction volumes over twelve months from September 1, set the floor under that asymmetry.
• On September 23, member states agreed to suspend invalidation of MSR holdings until end-2030, enlarging the reserve's future release buffer.

CROSS-REGIONAL DYNAMICS

• The EUA-UKA spread averaged $18.00/t and widened to $21.82/t on September 21, the widest since May 7, as UKA fell 6.95% (£) from September 14 to September 23 against EUA's 2.28%; it closed at $15.14/t after the September 29 UKA jump.
• WCA fell 17.59% on September 10 and closed at $38.75/t; the WCA-CCA spread compressed from $21.53/t to $6.50/t as linkage pulls Washington toward the California-Québec price. Ecology confirmed on September 23 that Washington is ready to link.
• CCA eased 3.65% to $32.25/t despite August's higher California-Québec auction.
• Korean allowances averaged $22.27/t (+12.75% MoM), peaking at $22.95/t on September 14. In USD terms at month-end, KAU rose to $22.14 from $21.43 while EUA Dec-26 was flat at $96.62, lifting KAU to 22.9% of the EUA price from 22.2%. Chinese CEAs slipped to 14.6% of the EUA price from 14.8%, at $14.09. Japanese renewable electricity J-Credits ($30.28) and NZUs ($30.25; monthly average -8.32% MoM after the failed auction) traded at similar USD levels.

DATA & POSITIONING

• EUA front December was flat while Dec+5 gained 1.38%; the front-to-Dec+5 discount widened $1.58/t, a third month of steepening after July (+$2.02/t) and August (+$1.16/t), with the MSR intake tightening forward supply rather than prompt balances.
• UKA steepened $1.30/t after a flat August; on September 29 Dec+2 gained $3.87/t against $3.55/t at the front, a strip-wide move rather than a prompt one.
• Korean offsets: on September 28 KRX opened consultation on resetting KCU and KOC reference prices to the KAU26 closing price of October 8, because the gap between current reference prices and KAU26 has effectively stopped on-exchange trading within the 10% price limits.
• China volumes: CEA trading rebounded in the week of September 21-24; daily average volume rose 64% on the prior week, with 7.54m tonnes traded in total, despite prices easing 0.25% week on week.

PRICE VOLATILITY

• EUA CV fell to 1.18%, the six-month low, against TTF's 5.35%; UKA doubled to 2.70% on its two decoupling legs.
• WCA's 13.42% is its six-month high and 5.9x August, driven by one repricing event; KAU compressed to 1.64%, its window low.

SOMETHING TO WATCH

• Washington-California convergence: the WCA-CCA spread stood at $6.50/t at month-end, from $21.53/t at the open. Linkage sets one price across three jurisdictions, so the gap closes through Washington falling or California firming. Watch Washington's Q4 auction notice and clearing price, and the daily WCA-CCA spread.
• European storage as the EUA swing factor: the EUA-TTF return correlation is at 0.45, with storage at the weakest seasonal level since 2009. A storage miss extends the gas rally and the switching demand behind EUA; a Hormuz reopening removes it. Watch weekly EU storage fill (GIE), TTF front-month and Parliament's handling of the Council's MSR amendment.
• Korea: KRX is consulting on resetting KCU and KOC reference prices to the October 8 KAU26 close, while monthly KAU26 auctions of 2.83m allowances continue through December. The current reference-price gap has stopped on-exchange offset trading within the 10% limits, so a reset sets the level at which that trading can restart. Watch the October 8 KAU26 close, the final KRX decision and cover at each monthly auction.
• New Zealand: the December 1 auction carries 10.4m units forward after seven consecutive failed auctions, three of them in 2026 and the September 8 sale with zero bids, with NZUs trading well below the auction floor. Units unsold after the final auction of the year are withdrawn rather than rolled into 2027, as all unsold 2025 units were; with 2027-30 auction volumes already fixed and the floor rising to NZ$75 in 2027, a December failure removes 2026 supply without adding to next year's. Watch the auction cover ratio, the NZU secondary price against the NZ$71 floor and November 7 election policy announcements.
• Australia: watch the Government response to the Safeguard Mechanism review consultation, particularly the post-2030 baseline decline rate.

Note: All figures, prices and market activity referenced in this report are based on the period 1 to 30 September 2026.