This newsletter was published 14.7.2021 at 4:45pm CEST

The current prices on the European carbon market are as follows:

After printing all-time high in July at 58.64 EUR, the price of EUA consolidated in the bottom of the range, at about 52 EUR. Most of the auctions cleared around the secondary market price, which confirms the current ranged market. With no real direction, trading volume in July has been moderate to low, and declining since July 7 selloff. The European energy complex has entered a trading consolidation phase, the only exception being API2 Coal, which continues to rise higher. The long awaited “Fit for 55” climate proposal from The European Commission, is aiming to correct 2030 emissions target and expand carbon coverage to other industries. Proposed increase of linear reduction factor of 4.2 percent could be interpreted as a long-term bullish signal, as well as one-off cut of the emissions cap, which could tighten supply in the future. Apart from utilities and heavy industries, the changes in EU ETS will now include shipping, transport and building, some corrections might also be proposed to the aviation industry. The European Commission aims to expand the size of the Innovation Fund, supporting research for cleaner technologies and decarbonisation possibilities. Additionally, the European Union plans to provide additional financing to the Modernisation Fund, in order to help Central and Eastern states upgrading and modernising their energy sector.

German power prices are up by 0.55EUR since last week, with the front year contract trading at 71.70 EUR/MWh. API2 coal prices are up by 5.25 USD since last week, with the Cal22 contract trading at 91.00 USD/tonne. EUR/USD is up by 20 points since last week and is currently trading at 1.1820.

Price development of EUA Dec2021 futures contract