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  • Carbon Update 21 Aug 2013

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    David Boles
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    The document discusses the carbon market and price of EU carbon allowances. It notes that the price of EUAs was at €4.36 at the time of writing. It may see bearish movement as auction volumes are set to double in late August, returning to normal levels. While one energy provider saw a 21% output increase, two major German utilities reported lower carbon demand in the first half of 2013. Approval of the 'backloading' proposal to stabilize the carbon market is still uncertain and may be delayed further. There are calls to make the carbon market less influenced by political decisions. One proposed solution is a carbon central bank to regulate prices within set bands.

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    The document discusses the carbon market and price of EU carbon allowances. It notes that the price of EUAs was at €4.36 at the time of writing. It may see bearish movement as auction volumes are set to double in late August, returning to normal levels. While one energy provider saw a 21% output increase, two major German utilities reported lower carbon demand in the first half of 2013. Approval of the 'backloading' proposal to stabilize the carbon market is still uncertain and may be delayed further. There are calls to make the carbon market less influenced by political decisions. One proposed solution is a carbon central bank to regulate prices within set bands.

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    24 views1 page

    Carbon Update 21 Aug 2013

    Uploaded by

    David Boles
    The document discusses the carbon market and price of EU carbon allowances. It notes that the price of EUAs was at €4.36 at the time of writing. It may see bearish movement as auction volumes are set to double in late August, returning to normal levels. While one energy provider saw a 21% output increase, two major German utilities reported lower carbon demand in the first half of 2013. Approval of the 'backloading' proposal to stabilize the carbon market is still uncertain and may be delayed further. There are calls to make the carbon market less influenced by political decisions. One proposed solution is a carbon central bank to regulate prices within set bands.

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    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 4.36. The auction supply pause every Wednesday fortnight is again cited for a return to bullish movement in the carbon price. ICE auction UK EUA's every fortnight. The end of August might result in a bearish movement as auction volumes will double again, resuming normal levels. Data from Dong, the Danish energy provider shows energy output up 21% in the first half of 2013. This may counteract reported data from RWE and EON last week which showed their carbon demand to be down in H1 2013. However it is important to note that RWE and EON conbined dwarf Dong's output. It looks like 'backloading' which needs approval from member states to be finally passed into law may be shunted down the line even further. It was widely believed that the issue would be resolved after German elections in September. Now, the Czech Republic declared that they will not make a call on the issue after the Czech general elections scheduled for October. No wonder there is calls to segregate the carbon markets from politics. One possible solution that is currently doing the rounds is the creation of a carbon Central bank. The bank could be responsible for setting carbon price bands, not unlike existing central banks setting targets such as inflation. The lower band would be high enough to promote domestic abatement and the upper band low enough so as not to adversely effect production costs. The carbon central bank would then control allowance release to keep prices within the band. TheCalifornian Cap and Trade has taken a step towards this idea with a floor price and price containment reserve.
    Dec 13 EUA

    Past performance may not be a reliable guide to future performance. Mention of specific commodities should not be taken as a recommendation to buy or sell these commodities. Commodity Trading is risky and DBLM Solutions assume no liability for the use of any information contained herein. Past financial results are not necessarily indicative of future performance. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to accuracy. Any examples given are strictly hypothetical and no representation is being made that any person will or is likely to achieve profits or losses similar to those examples. Neither this information, nor any opinion expressed, constitutes a solicitation to buy or sell futures or options or futures contracts, or OTC products. Reproduction without authorization is forbidden. All rights reserved. DBLM Solutions.

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