Issue LXXXIII

Carbon Newsletter

DBLM Solutions
06 June 2013
The EUA Dec13 contract is currently at 3.95. Carbon gained until lunchtime yesterday on the back of healthy auction demand, but regressed thereafter to current levels as participants took profit. Recently EUETS data was published. The largest emitters in the EUETS in 2012 were energy producers RWE, E.ON and Vattenfall. They emiitted 157 MtCO2, 92 MtCO2, and 90 MtCO2. These values were calculated at group level., including stakeholdings in other companies included in the EUETS. For example,RWE experienced a shortfall of 45 million allowances. At current prices, RWEs allowance shortage represents a cost of 174,150,000.
Weekly Recap ICE EUA Spot 3.77 3.90 3.87 3.91 3.88 811 2.91% ICE CER Spot 0.39 0.40 0.40 0.40 0.38 0 -2.56% ICE EUA Dec13 3.82 3.95 3.92 3.96 3.91 80,818 2.35% ICE CER Dec13 0.40 0.41 0.41 0.40 0.40 930 -

we witnessed the week before and 2.98 the previous week.

Auctions
EEX held auctions last Thursday, Friday, Monday and Tuesday,auction prices were 3.65, 3.96, 3.80 and 3.90 respectively. The cover ratios for the above auctions were 2.12,2.43,2.48 & 4.07 respectively.(Cover ratio Amount of bids/actual volume). The ICE exchange also held the fortnightly UK auction. They sold 4,134,000 EUAs at 3.96 each. In total an extra 18,539,000 EUAs were brought to the market place.

Global Carbon Markets

It is interesting to note even though the EUETS is bombarded with negative press, it is very evident that carbon markets are proliferating through the global stage as illustrated below.

30/05/2013 31/05/2013 03/06/2013 04/06/2013 05/06/2013 Volumes lots Week %

In 2012, the three companies with the highest surplus of EU carbon allowances (EUAs) were two steel makers and one cement manufacturer : ArcelorMittal (37 million EUAs surplus), Tata Steel (17 million EUAs surplus) and Lafarge (12 million EUAs surplus). The EUA/CER spread widened this week to 3.50 at close of business last night versus the 3.31 spread

Today, over 40 national and 20 subnational government jurisdictions have implemented or signalled an intent to initiate a carbon cap and trade system in the near future.

The contents of the Newsletter is not a recommendation, either implicit or explicit, to buy or sell emission permits. Contact: David Boles, Compliance Markets -Direct: +3531 4433 584; Mob:00353 831744707 DBLM Solutions is partly funded by the Wicklow Enterprise Board.