7/28/2019 DBLM Solutions Carbon Newsletter 23 May.pdf
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Issue LXXXI
The contents of the Newsletter is not a recommendation, either
implicit or explicit, to buy or sell emiss ion permits.Contact:
David Boles, Compliance Markets -Direct: +3531 4433 584; Mob:00353
831744707
DBLM Solutions is partly funded by the Wicklow Enterprise
Board.
Carbon Newsletter
DBLM Solutions 23 May 2013
The EUA De c13 contract is currently at 3.28 . TheICE exchange
announced yesterday that they willrelaunch their spot CER product
on the 27 th May,after two weeks of no trading facility.
Today, we will take a quick trip around the world scap and trade
emission trading schemes. In Californiathis week, officials held
their third auction, achievingrecord prices. The state sold 14.5
million allowancesat $14 each last Thursday. On sale also,
allowancesthat covered emissions in 2016, 7.5 million were soldat a
discount of $10.71/allowance. Allowances in thesecondary market
witnessed healthy trade after the
auctions, reaching the $14.50 level. To date theCalifornian
auctions have raised $256 million for thestate and $556million for
utilities who must utilise themonies to keep end users costs
reasonable.
WeeklyRecap
ICEEUASpot
ICECER Spot
ICEEUA
Dec13
ICE CER Dec13
16/05/2013 3.65 - 3.70 0.39
17/05/2013 3.49 - 3.54 0.39
20/05/2013 3.55 - 3.60 0.37
21/05/2013 3.50 - 3.56 0.38
22/05/2013 3.27 - 3.32 0.34
Volumes lots 13,245 - 65,704 4,760
Week % -10.41% - -10.27% -12.82%
Over to China now. Good news from China withthe announcement
that they are set to impose a capon their emissions for the first
time in 2016. Thismove is declared as a tranformational boost
to
ongoing global climate negotiations. China is nowresponsible for
a quarter of global industrial and
power producing emissions. The announcement
gives a much needed boost to a successful outcomein developing a
satisfactory frame work for aninternational treaty to be agreed in
2015 andenforced by 2020.The third largest global emitter, Russia
hasregressed further this week, after backing out of Kyoto during
the year. Officials have pointed to theEUETS as an example of cap
and trade notworking.The cost of the energy gap between the US
andEurope is growing with cheap energy from shalegas adding to the
mix. As the US is Europe s maintrading partner, Europe s main
energy policymakers have taken note. A revised call has beenmade to
ensure energy policy post 2020 isdetermined sooner rather than
later. It is estimatedthat if the European market becomes
fullyintegrated a saving of 35 billion could be achievedannually in
electricity costs in 2015 compared to2012. This is why it is
essential to have a wellfunctioning carbon market to aid
renewableinvestment.The EUA/CER spread narrowed this week to 2.98
atclose of busi ness last night versus the 3.24 spreadwe wit nessed
the week before and 3.15 the previousweek.
AuctionsEEX held auctions last Thursday, Friday and
Tuesdayauction price s were 3.47, 3.55, 3.49 respectively.The cover
ratios for the above auctions were2.45,2.81 & 2.92
respectively.(Cover ratio Amountof bids/actual volume). The ICE
exchange also held
their fortnightly auction of 4,134,000 EUA s . Thisauction
cleared at 3.43 / EUA. In total an extra15,078,000 EUAs were
brought to the market place .
