This newsletter was published 23.12.2020 at 17:24pm CEST

EUA carbon price became even more volatile as we approach end of year. On Friday it started to fall from record levels seen last week and then dropped below 30 EUR on Monday, although just for a short period. Later that day prices recovered and now we are again in the bullish mode.  Dec21 future contract is now trading around 32 EUR, just half a Euro below its all-time high that was reached last Wednesday. It looks that this 10% drop was just a normal market correction that happened after a non-stop rise in prices seen this month. Cold weather prospect in Europe are also supporting further rise in carbon prices in the near future.

The European Energy Exchange (EEX) has published the 2021 calendar for the auctioning of European emission allowances (EUA) as well as European aviation allowances. Auctions will start again on the 29th of January. Auctions will also include a volume of 40 million allowances for the Innovation Fund and 69.38 million allowances for the Modernisation Fund.

Other energy markets are bullish as well. German front year power contract is currently trading at 47.50 EUR/MWh, Brent oil at 51 USD per barrel and API2 coal is at 69 USD per tonne. EURUSD is now little above 1.22 level.

Price development of EUA Dec2020 futures contract