Carbon Weekly Newsletter

This newsletter was published 9.9.2020 at 18:22pm CEST

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

EUAs have fallen along with the rest of global markets. However, despite prices being lower than last week, dips are still being bought and compared to the rest of the global markets, EUAs have held up quite well. EUAs have still not managed to post more than 3 consecutive negative days since mid-March. The increased volume of September’s auctions has been absorbed well so far which confirms the market strength we have seen since April. While some short-term pressure may arise as a side effect of the weakness on other markets, strong support at 25 EUR/EUA could keep the prices elevated. Especially as we slowly start preparing for winter months where EUA prices were historically strong. Upside is further supported by the EU Commission talks about possibly raising the 2030 emissions reduction goals. While the current goal has been set at 40% reduction against 1990 levels, it will likely get increased above 50%, with proposals going as high as 65%. Actual targets are expected to be communicated by the Commission next Wednesday. If EUA prices manage to break below the 25 EUR/EUA level in the coming weeks, further downside possibility towards 22 EUR/EUA is unlocked.

German power prices are down 1 EUR/MWh since last week, with the front year contract trading at 41.00 EUR/MWh. API2 coal prices are unchanged since last week, with the Cal21 contract trading at 56.50 USD/tonne. EUR/USD is also unchanged since last week and is currently trading at 1.1830.

Price development of EUA Dec2020 futures contract
Yours sincerely,
Jan Kresnik 
Carbon Trader

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