Carbon Weekly Newsletter

This newsletter was published 26.4.2023 at 15:52pm CEST

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

EUAs have tumbled by almost ten euros in last five trading sessions as majority of compliance companies finished with purchases for 2022 emissions. Market has been falling in a more or less a straight line, with sellers being in control of market dynamics. It seems that not only buyers disappeared on the way down, but also that sellers took initiative. Pullbacks to the upside have been short lived, and any occasional buying activity soon encountered immovable wall of sellers. Bearish bias could be confirmed by healthy intraday trading activity in futures and auctions, which have been in last five occasions clearing below secondary market. Fundamentals are not supportive of EUAs either, especially warmer weather in central Europe and hence lower energy demand. The news that might have even amplified the selling pressure in EUAs could be a report issued by France’s nuclear regulator ASN, which stated that revised maintenance plan for corrosion in EDF’s nuclear power plants is acceptable and should not affect production beyond planned outages. This caused a sharp drop in power prices, not only in France but also in Germany and elsewhere in Europe. More nuclear power production might positively affect volatility of power prices and contribute to lower average prices. Other related markets have been in a bearish trend as well, taking off some pressure from households and especially energy intensive industries.

German power prices are down by 5.00 EUR since last week, with the front year contract trading at 142.00 EUR/MWh. API2 coal prices are up by 6.50 USD since last week, with the Cal-24 contract trading at 134.00 USD/tonne. Front year gas prices are down by 0.350 EUR since last week, with the TTF Cal-24 trading at 54.350 EUR/MWh. EUR/USD is up by 120 points since last week and is currently trading 1.1080.

Price development of EUA Dec2023 futures contract

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