This newsletter was published 07.08.2024 at 17:18pm CEST

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

EUAs have been firmly anchored around the 70 EUR level, just weeks before compliance deadline at the end of September. Companies and utilities were accustomed to surrendering allowances by the end of April, however, from 2024 onward, there has been a change. Daily auctions have, in most cases, cleared at a premium to the secondary market, indicating strong buying interest. Moreover, cover ratios have been healthy and more than 5 million bids usually submitted for a given European auction. The weekly Commitment of Traders report indicated that investment funds have started to close or at least reduce their net short exposure in EUAs. This could be due to the approaching compliance deadline, as well as the anticipated heatwave and consequently increased thermal power generation. Last week, EEX also updated the auction calendar for the period between September and December 2024 and for the year 2025. Starting in September, the volumes will be substantially increased compared to current auctions, potentially exerting some bearish pressure in the last quarter of the year. During the past week, EUAs have not been affected by the turmoil in global financial markets. Not only did EUAs remain uncorrelated to risk-on assets, but volatility also remained low. Low volatility is usually a sign of good price discovery and an overall balance between buyers and sellers.

German power prices are up by 2.28 EUR since last week, with the front-year contract trading at 96.10 EUR/MWh. API2 coal prices are up by 6.80 USD since last week, with the Cal-25 contract trading at 125.00 USD/tonne. Front-year gas prices are up by 1.410 EUR since last week, with the TTF Cal-25 trading at 40.350 EUR/MWh. EUR/USD is up by 90 points since last week and is currently trading at 1.0930.

Price development of EUA Dec2024 futures contract