September 2026 | FuelEU Index & Market Commentary
Executive Summary FuelEU Index & Market Commentary | September 2026
September saw the FuelEU surplus market extend the downward trend established over recent months, despite an increase in liquidity post summer. The non-volume-weighted monthly average declined to 95.53 EUR/t CO₂e, while the volume-weighted monthly average stood at 95.17 EUR/t CO₂e. On 30 September, the market closed at 87.25 EUR/t CO₂e on a non-weighted basis and 86.45 EUR/t CO₂e on a volume-weighted basis.
The continued decline reflects the absence of any improvement in the underlying fuel-cost backdrop. Fossil fuel prices remained elevated, while the Strait of Hormuz continued to present a source of disruption risk. Contemporary bunker-market reporting through late September showed higher HSFO and VLSFO levels into month-end driven by renewed geopolitical risk premium. This sustained a low implied mitigation-cost environment for biofuel-based compliance and continued to weigh on surplus valuations.
Overall, September confirms that the 2026 FuelEU market remains in a lower-price regime, with modestly higher liquidity failing to alter the broader direction of price formation.
Market Dynamics & Trends
Following the summer, September brought a moderate increase in activity. However, the increase in liquidity did not translate into stronger price levels. Instead, the market largely maintained its downward trajectory, suggesting that the lower-price environment reflects a broader repricing of surplus under current fuel-market conditions.
The monthly averages underscore this move. Relative to August, the non-weighted monthly average declined from 109.72 EUR/t CO₂e to 95.53 EUR/t CO₂e, while the volume-weighted monthly average fell from 108.89 EUR/t CO₂e to 95.17 EUR/t CO₂e. The end-of-month levels further reinforce the softer tone, with both closing measures settling in the high-80s.
Fuel economics remained the dominant external driver. Geopolitical tensions linked to the Strait of Hormuz continued to support bunker prices during September, limiting any recovery in implied biofuel mitigation costs.
Demand remained visible, while the window for biofuel consumption and associated surplus generation is gradually narrowing. However, returning liquidity has been distinctly price-sensitive, with buyers willing to execute but reluctant to clear meaningfully above prevailing market references.
Market Structure
September showed relatively limited divergence between the two indices on a monthly basis, with the non-weighted average at 95.53 EUR/t CO₂e and the volume-weighted average at 95.17 EUR/t CO₂e. This suggests that, unlike in some prior months, smaller-ticket transactions did not materially distort the broader monthly market signal.
At the same time, the month-end closing levels, 87.25 EUR/t CO₂e on a non-weighted basis and 86.45 EUR/t CO₂e on a volume-weighted basis, indicate that the more liquid end-of-month market cleared at even lower levels than the monthly average suggests. This is an important signal: as trading activity improved after summer, executable prices did not strengthen but rather pointed to continued softness in the market.
This reinforces the interpretation that the prevailing price environment is being driven by fundamental cost references rather than temporary liquidity effects. The weighted and non-weighted measures are now converging around a lower market range, indicating that the current level is increasingly being accepted across transaction sizes.
Market Context
A key strategic question emerging from current market conditions is what happens if the present surplus-generation economics persist. If elevated fossil fuel prices and correspondingly low implied biofuel mitigation costs remain in place for an extended period, the FuelEU market could enter a more persistently imbalanced phase.
Such an outcome would have broader implications for market design. If low-cost surplus generation remains available over time and banking continues to allow those volumes to roll forward, the market could experience an increasing accumulation of surplus. While it is too early to draw regulatory conclusions, the current environment may ultimately raise policy questions around banking and the resilience of the market framework under prolonged external fuel-price distortions.
For now, September confirms that the FuelEU surplus market remains closely tied to geopolitical fuel-market conditions. Until the underlying bunker-cost environment normalises more materially, any rebound in surplus values is likely to remain limited.
FuelEU Index & Market Commentary | September 2026 | 01/10/2026
Track the monthly surplus index here. Do you need access to averages across specific time periods or daily prices? Reach out to us by clicking here.
Comments