Carbon Weekly Newsletter

This newsletter was published 19.10.2022 at 16:44pm CEST

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

Past week was calm, with low trading volumes mostly transacting in already well-established range. It seems like the market has become less affected by almost any type of news and is at the moment mostly compliance driven. EUAs even remained stable when the European Commission proposed some additions to the REPowerEU initiative, in order to become less dependent on imported fossil fuels. Propositions were introduced alongside proposals to gas market intervention, which could take place in the coming days. Commission also added, that proposed changes should not affect competitiveness of European industry too much and on the other hand provide basis for more energy independent EU. How will those amendments manifest, in contracting economy is yet to be seen, however political will is present. Auctions in the past week have in all but one cases been very strong and cleared above secondary. The only exception was auction on Monday, however market quickly rejected lower price and headed higher. Cover ratios have been in all instances above two, which has usually been a sign on strength or at least short-term demand. A major factor that has been recently affecting pricing of EUAs, gas and power, has been weather. Higher than usual temperatures are the main reason energy consumption remains lower than average, while storages keep getting fuller. Several LNG tanker ships are waiting for offloading at terminals, however most of them remain occupied. LNG flows have started to increase, however the main issues remain on the ports which are ever more congested.

German power prices are down by 49.00 EUR since last week, with the front year contract trading at 386.00 EUR/MWh. API2 coal prices are down by 25.00 USD since last week, with the Cal23 contract trading at 245.00 USD/tonne. EUR/USD is up by 90 points since last week and is currently trading 0.9790.

Price development of EUA Dec2022 futures contract

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