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 3.41. Carbon rose this morning after a bearish run that started last Thursday. EU auctions on EEX continue to be successful, indicating demand still exists. Doubt was cast over the backloading vote scheduled for the first days of July when Chancellor Merckel said yesterday that there will be no EUETS reform until after the German September elections. She also called for ambitious GHG mitigation targets post 2020. The Global climate Conference which will be held in Poland in December was cited as a target date for Europe to agree on new targets. Chancellor Merckel indicated that Energy and Climate policy goals would be at the forefront of political ambition in the second half of 2013. Aviation emission talks are ongoing, by the International Civil Aviation Organisation(ICAO) but the general consensus is that little progress is being made and a global framework to curb aviation emissions will not be ready by the September deadline. Delegates are pushing for a simplified system whereby International airlines purchase offsets to cover emissions above a predetermined baseline. This system would be a real lifeline for the Clean Development Mechanism and Joint Implementation. By 2020, the Aviation sector would need approximately 100 million offsets per year. This figure equates to 25% of CER's issued in 2012. Other options being discussed are mandatory offsetting that would raise revenue to fund joint measures to address climate change and a global emissions trading scheme, similar to the European Unions carbon market.
Dec 13 EUA

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