Issue XCVV

Carbon Newsletter

DBLM Solutions
30 Octoberr 2013 The EUA Dec13 contract is currently at 5.04. EUAs surged yesterday on the back of news that the coalition parties seeking to form the new German Government agree on the backloading issue. Carbon climbed over 5%. European power prices point to a bearish carbon price. German and French wind output is down, combined with forecasted dropping temperatures in the two Nations. On the flip side, wind is down from previous levels as storm conditions subside. For example, German wind is due to halve between Tuesday and Wednesday to 6.3 GW. The UK Storm saw German wind output reach 23 GW, two thirds of installed capacity.
Weekly Recap ICE EUA Spot 4.60 4.65 4.99 4.80 5.07 1,532 10.21% ICE CER Spot 0.52 0.52 0.54 0.53 0.52 0 0% ICE EUA Dec13 4.62 4.67 5.01 4.83 5.09 92,337 10.17% ICE CER Dec13 0.51 0.51 0.53 0.52 0.52 1,337 1.92%

auction volume) In total an extra 18,065,000 EUAs were brought to the market place.

Unburnable Carbon
Over the last month, a coalition of Investors have approached the largest fossil fuel companies to seek clarification over fossil fuel investment that may never be commercialized due to upcoming climate change agreements. It is estimated that approximately 30% of the value of existing stock values can be attributed to fossil fuel reserves. Commercials left holding these unburnable stockpiles could see their market values slashed. Pension funds have taken note and seem to be aware of the long term risk associated to climate change policy that may effect unburnable carbon Lately, there is much talk of a central bank for carbon that could regulate the supply of carbon allowances into the market. Analysts at Reuters have estimated that if such a measure is implemented, an average price of 28 could be witnessed between now and 2030.

23/10/2013 24/10/2013 25/10/2013 28/10//2013 29/10/2013 Volumes lots Week %

US
On Tuesday, the United States stated that they plan to leverage their influence in global development banks to cease funding for coal fired power plants. They will only finance coal projects in the poorest countries if they have no other efficient or economical alternative. The World Bank is a prime example where US influence could abate coal power development. The impact may not be seen immediately, as bilateral support and the private sector will continue to finance these projects in the short term.

Auctions
EEX held auctions last Friday, Monday x2 and Tuesday,auction prices were 4.58, 4.61,4.85, 4.81 & 4.78 respectively. The cover ratios for the above auctions were 2.90. 2.34. 2.03 & 2.17 respectively (Cover ratio Amount of bids/actual

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.