DBLM Solutions

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@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 4.07. German and French power for 2014 delivery are down slightly. German power was down 13 cents to 37.50 and the equivalent French derivative is up 10 cents to 41.90. So, not much of a signal to price direction there. We are still close to 8 year lows, which tells its own story. Consultants have predicted that participants are likely to pay more for their carbon mandate as reforms look very likely for Phase 3. On Wednesday the European Commission added 2 sectors and 4 subsectors that may be susceptible to carbon leakage(ie, commercial sectors that are at risk of moving outside the EU due to the cost of carbon) for the period 20092014.The two sectors that are added are plaster and plasterboard. The 4 subsectors added are open die forging, solid whey and 2 subsectors related to processes potato products. The implication of this move is that these sectors and subsectors will receive a higher free allocation for 2014. The commission now submits the draft decision to the European Parliament and if there is no objections for 3 months, the European Commission adopt and publish the decision after which it will enter into force.
Dec 13 EUA

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