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Luciano Magliocco +353 87 9051928 (Mobile) dblmluc (SKYPE) luc@dblmsolutions.com

DBLM Solutions Carbon Update

Carbon Overview

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

At time of writing the Dec '13 EUA Contract was at 3.14. The lowest price to date for the EUETS was on Wednesday around 2 pm at 2.46. Some commercials obviously responded as volumes also hit record levels. The price has been slightly bullish since then. If we look at products highly correlated to carbon we can also see a rise in German power, prices for delivery today are up 7.75 to 33.75 per megawatt hour. French baseload also rose by 6 to 35 a megawatt hour. Falling temperature forecasts and less renewable input are to blame. Brent also turned after 6 days straight of losses, all helping to prop up Carbon, but only marginally. Over the past couple of days, talks have continued on 'backloading' in Brussels. Parties who favour the proposal are trying to get individual member state approval, which would invoke a second reading. For it to be rejected totally an absolute majority would be needed, i.e 378 votes. and if not the measure would be deemed adopted as proposed by member states. It looks like it is now up to member states to decide and as it wasn't killed off initially and a majority vote wasn't achieved. Some might be optimistic for the second reading. The only states that are categorically against 'backloading' are Poland, Greece and Cyprus with Germany and the Czech Republic undecided.
Dec 13 EUA

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