Experienced individuals in the EU carbon market are aware of one thing: the EU carbon market always surprises. After a remarkable five-fold increase in less than 24 months last summer, the market, once the best-performing global commodity, experienced a significant plunge, hitting a near two-year low in March.
As the compliance deadline of April 30th approaches and with the Easter weekend behind us, we took the opportunity to share the thoughts of attendees from our Coronavirus and the EU ETS webinar on the question: “What will the EUA price be at the end of 2020?” The results are graphed above.
Most respondents, 42%, believe that EUAs will cost between €20 and €25 by the end of the year. Surprisingly, EUAs found themselves in this range on the next business day after the “Coronavirus bounce” experienced in global markets. Trevor Sikorski shared during the webinar, but after the poll, that his price forecast for Q4 2020 was in the same range.
Following closely behind, an almost equal number of webinar participants believe that the impact of COVID-19 will be significant enough to keep the EUA price within the range of €15 to €20. Despite the optimistic predictions of rapid economic growth in a matter of months from figures like Donald Trump, a substantial portion of our audience remained sceptical.
Only 9% and 8% of respondents believe that EUAs will be priced below €15 or between €25 and €30, respectively, by the end of 2020. Interestingly, no one selected the option of a price exceeding €30. Despite the turmoil caused by the virus, the positive takeaway is that attendees do not expect the economy to deteriorate to the point where EUA prices collapse, making compliance with the EU ETS in 2020 more affordable.
