Carbon Weekly Newsletter

This newsletter was published 6.4.2022 at 16:55pm CEST

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

Past trading week was calm, with slowly decreasing intraday volatility and lower than average trading volumes. Even though news about MSR and coal imports from Russia have been released, markets have not been affected. For the most part order book remained thin, the only exception being extremes of the range. Average number of bids placed on exchanges has been going down since early March, which coincides by Russian invasion on Ukraine. This has caused sideways price action, which has been going on for almost three weeks now. Unwillingness by larger participants to take any risk can be also seen on price chart. Correlation between natural gas and EUA is still negative and it seems this might continue be the case in the future if prices stay around current levels. Auctions in the past week have been in all instances well covered, which could be a direct result of compliance buying. At the moment it seems this demand is the only buying power preventing a bigger dip in EUAs. A longer-term support in the coming years could be provided by strengthened and extended MSR, which will be continuing its annual intake of 24 percent until at least 2030. Parliamentary voting was heavily in favour of extension, which may indicate that current global political and economic situation did not divert attention from emission goals.

German power prices are up by 7.50 EUR since last week, with the front year contract trading at 188.50 EUR/MWh. API2 coal prices are up by 30.00 USD since last week, with the Cal23 contract trading at 220.00 USD/tonne. EUR/USD is down by 230 points since last week and is currently trading at 1.0920.

Price development of EUA Dec2022 futures contract

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