This newsletter was published 7.10.2020 at 18:26pm CEST

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

Ambitious European Parliament climate vote failed to push EUA prices higher. Preliminary voting that took place on Tuesday evening showed that majority supports a higher emissions reduction target of 60%. That came as a positive surprise as many were expecting a 55% target. This target aims to reduce carbon emissions by 60% compared to 1990 levels and is a great improvement to the previous 40% target that was set back in 2014. Market initially moved more than 1 EUR higher on the announcement in a couple of minutes but the move was completely undone until the end of trading day on Wednesday. Prices keep changing direction violently in intraday moves and any strong intraday trends have been completely reversed in the next day for the last two weeks. It appears that we will need a very cold winter forecast to manage pushing EUA prices above 30 EUR/EUA until the end of the year. Market remains well supported at the lower part of the trading range. October will see the highest monthly volume offered on auctions this year with total number of allowances being sold reaching almost 88 million EUA. So far, the market has absorbed the volumes well, thus it appears that it will continue to trade in the range between 26 and 28 EUR/EUA in the short term.

German power prices are unchanged since last week, with the front year contract trading at 41.40 EUR/MWh. API2 coal prices are also unchanged since last week, with the Cal21 contract trading at 59.90 USD/tonne. EUR/USD is up by 50 points since last week and is currently trading at 1.1760.

Price development of EUA Dec2020 futures contract

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