This newsletter was published 8.2.2024 at 10:45pm CEST

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

In February, EUA prices have found a stable range between 62 and 65 EUR, despite showing a significant drop of over 20% since the start of the year. This downward trend has been ongoing for a year, tracing back to a peak of over 100 EUR last March. The market has little reason to rise with reduced energy price forecasts, reflecting analysts’ economic growth projections for 2024 being adjusted downward. Despite long-term predictions favouring higher prices, the immediate outlook for the next year or two remains pessimistic. The EU’s ongoing auctions to raise 20 billion EUR for its green transition, ending in August 2026, add to the market’s challenges. Investment funds have been increasing their bets against the market, growing their short positions for the last six months, expecting further declines. This considerable short interest, around 33 million EUAs, may buffer against sharp price drops as these positions are covered at lower prices, but current data suggests a trend reversal is unlikely.

German power prices are down by 4.50 EUR since last week, with the front year contract trading at 78.20 EUR/MWh. API2 coal prices are down by 1.25 USD since last week, with the Cal-25 contract trading at 95.00 USD/tonne. Front year gas prices are down 1.500 EUR since last week, with the TTF Cal-25 trading at 31.000 EUR/MWh. EUR/USD is down by 80 points since last week and is currently trading 1.0780.

Price development of EUA Dec2024 futures contract