Carbon Weekly Newsletter

This newsletter was published 28.12.2022 at 17:22pm CEST

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

Trading during the holiday season has been very quiet, with some volume spikes in range bound market with low liquidity. Lack of participation has led to trading ranges of more than 3 EUR intraday, despite no real change in fundamentals. Even though market appears to be range bound, EUAs might be slowly sliding towards 85 EUR price level, regardless of auction pause. Reason could lie in above average temperatures, down trending power and gas prices, and overall reduced energy consumption. Benchmark German power Cal-2023 fell by 10 more percent since last week and repeated pattern from last year when it slid lower almost every day until delivery. Daily auctions will resume on January 9, after a twenty-day pause. Supply offered on coming daily auctions will be slightly reduced from the start in comparison to last year by 226.500, or 653.000 allowances per week. However, additional sales proposed by recent trialogue are not yet considered. After a wild run in 2022 with many unexpected events that affected the market, occasionally extreme volatility, political actions, and energy crisis, we would like to take this opportunity to wish you a Merry Christmas and a Happy New Year. May 2023 be peaceful, joyful and fulfilling.

German power prices are down by 29.50 EUR since last week, with the front year contract trading at 239.50 EUR/MWh. API2 coal prices are down by 18.00 USD since last week, with the Cal24 contract trading at 170.00 USD/tonne. EUR/USD is up by 30 points since last week and is currently trading 1.0650.

Price development of EUA Dec2023 futures contract

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