Weekly carbon trading update – 4th September 2017

Market developments:

  • Carbon falls back from recent highs to end the week at €5.83
  • The 4.4% fall reverses the previous week’s gains
  • Power and coal prices also fall but clean dark spreads little changed
  • Governments back further global growth and cooperation in ETS’s
  • Carbon floor prices should be implemented according to French think-tank

EU Allowance Auction Overview:

  • Volume almost doubles to ~21.5Mt from ~11.2Mt last week
  • September auction supply more than doubles to ~91.8Mt, up from ~44Mt in August
  • See auction table below for details

Carbon Forward 2017 Conference speakers updated, hear from world experts

Redshaw Advisors have negotiated up to 70% off tickets to attend Carbon Forward 2017, this year’s principle carbon market conference.  This year’s conference will be held at the 5-star Canary Riverside Plaza Hotel in London’s Canary Wharf


EUA PRICE ACTION

Carbon fell more than 4% last week to reverse the previous week’s gains. In the face of increasing auction supply and falling power prices carbon could not continue the upward momentum seen through August. Monday saw further intra-day gains amid thin market conditions due to a UK holiday as EUAs hit €6.20, extending recent highs, before falling away into the close to end the day flat. The rest of the week saw prices close lower on each of the 4 days as some of the froth came out the market with the increased auction volume looming and power prices falling away. Auction volumes returned to normal on Friday and September volumes are more than double those of August. The impact of falling carbon prices on the clean dark spreads was muted as power also fell to leave them little changed week-on-week. Price Impact: the fall in carbon prices last week does not necessarily mean carbons bullish run is over with many of the supportive fundamentals witnessed over the last few months still in play

WEEK AHEAD

Auction volumes almost double this week to ~21.5Mt and will test a market slowly cranking back into top gear following the summer holidays. Power prices will again play a large role in determining the direction for carbon this week, further falls for power will likely be mirrored by carbon prices. However, all is not lost for carbon’s bullish run – on-going uncertainty over nuclear power generation remains and with thermal generation stepping up to fill the gap, emissions are likely to remain higher than expected in the near future. Coupled with this, industrial output figures so far in 2017 have surprised to the upside and could lead to higher demand through Q4. Renewable generation in the short term is unlikely to improve as hydro stocks remain low and solar generation tails away. All in all, further falls would not come as a surprise but the supportive fundamentals will likely limit those falls and could still lead the market higher.


OTHER NEWS

Governments reaffirm desire for emissions trading to lead the climate change fight.

The governments of 26 national and sub-national jurisdictions have reaffirmed their desire for emissions trading to lead the fight against climate change. As part of the International Carbon Action Partnership (ICAP) the jurisdictions including Germany, the UK, France, California, New York, Quebec, Switzerland, South Korea, Japan and New Zealand signed a statement confirming their desire for emissions trading to continue growing and co-operating worldwide. Emissions trading across borders will be a key building block in many jurisdictions’ strategies towards achieving a low-carbon economic transition and meeting their pledges under the Paris climate agreement, ICAP said.

To find out the latest on carbon pricing initiatives around the world with analysis from those at the fore-front of global emissions trading, book your place to one, two or all three days of the Carbon Forward conference.

 

Think-tank backs national carbon floor prices

French think-tank Terra Nova has called for seven countries in Western Europe to adopt carbon floor prices for utilities in a bid to boost carbon prices. The report suggests France, Germany, Belgium, Italy, the Netherlands and Spain should introduce floor prices whilst the UK already have a domestic floor price in place. Terra Nova believe national measures would be far easier than to implement than EU-wide legislation due to stern opposition from Eastern European Member States. If floor prices were to be implemented the additional revenue collected by Member States should be used to buy and cancel the surplus allowances created according to Terra Nova.


Carbon Forward is back and Redshaw Advisors announced as official partner

The EU ETS is changing and those with most at risk, industry and aircraft operators, are in most need of understanding the impacts of the changes. The Carbon Forward 2017 conference will, with the help of a line-up of expert speakers, examine the issues affecting companies with exposure to the EU Emissions Trading System (ETS) and provide some answers. The conference will focus on:

  • Brexit – the effect on EUA prices and UK emitters
  • Carbon price rises – how the Market Stability Reserve changes everything
  • Free allocation – how the Phase IV (2021-2030) review impacts your bottom line
  • Advice – how to maximise free allocation and receive grants for new technology

EU ETS emitters are already expected to foot the bill for Europe’s flagship emissions reduction programme so to help reduce the financial burden Redshaw Advisors have negotiated special discounts for you. We are able to offer all companies emitting less than 1,000,000 tonnes of CO2 per year up to a 70% discount to the normal conference ticket prices as follows;

Training day (26th September) Normal price: £349, EU ETS emitters price: £249 + VAT (-38%)
Day 1: EU ETS (27th September) Normal price: £549, EU ETS emitters price: £189 + VAT (-66%)
Day 2: Global Markets (28th September) Normal price: £549, EU ETS emitters price: £189 + VAT (-66%)
Training + Day 1: EU ETS. Normal price: £799, EU ETS emitters price: £399 + VAT (-58%*)
Training + Day 2: Global Markets. Normal price: £799, EU ETS emitters price: £399 + VAT (-58%*)
Day 1: EU ETS + Day 2 Global Markets. Normal price: £899, EU ETS emitters price: £329 +VAT (-70%*)
Training + Day 1 + Day 2. Normal price: £1,099, EU ETS emitters price: £549 + VAT (-63%*)
*% reduction calculated by comparing to the cost of buying individual days

There is strictly limited availability of these discounted tickets so book your place now to avoid disappointment.
You can ask us to reserve you a ticket of your choice and the Carbon Forward team will send you an invoice or you can click on the links above to be taken straight to a WorldPay site to buy the tickets with a debit or credit card (note ticket prices will have VAT added to them that can be reclaimed). More details of the conference can be found at the Carbon Forward 2017 website.

 

 

 

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