Issue CXCIV

Carbon Newsletter

DBLM Solutions
23 July 2015

The EUA Dec14 contract is currently at 8.08.

EUAs rose sharply over the last week, breaching
the 8.00 mark for the first time since 2012.
Reasons given for the rise are the the post 2020
reforms proposed on the 15th July. The reforms for
Phase 4 include:
The overall quantity of allowances will
decline by 2.2% every year starting from
2021 (compared to 1.74% in Phase 3).
In addition to the recent MSR reforms, the
Commission proposes to use 250 million
unallocated allowances from the MSR in
2013-2020 to establish a reserve for new
and growing installations.
A revision of the system for free allocation
to industry, with some getting 100% of
required allowances, and others just 30%.
Some 400m allowances reserved for a an
"Innovation Fund" to support first-of-a-kind
investments in renewable energy, carbon
capture and storage (CCS) and low-carbon
innovation in energy intensive industry.
No provision for use of international carbon
credits for compliance.
Each member state has to vote and the process
should take at least 2 years to get to European
Directive stage.

Weekly
Recap

ICE
EUA
Spot

ICE CER
Spot

ICE
EUA
Dec15

ICE CER
Dec15

16/07/2015

7.65

0.46

7.68

0.42

17/07/2015

7.67

0.45

7.76

0.41

20/07/2015

7.93

0.47

8.00

0.45

21/07/2015

7.89

0.46

7.97

0.44

22/07/2015

7.90

0.47

7.96

0.44

Volumes lots

2,144

18

68,118

214

Week %

3.26%

2.17%

3.64%

4.76%

The EUA/CER spread widened this week to 7.43,

at close of business last night versus the 7.33
spread we witnessed last week and 6.99 the week
before.

Auctions
EEX held auctions last Thursday, Friday, Monday
& Tuesday. Auction prices were 7.69, 7.60,
7.76 & 7.92 respectively. The cover ratios for the
above auctions were 3.47, 2.00, 2.63, & 2.17
respectively. (Cover ratio = no. of bids divided by
auctioned allowances.

UK
On Wednesday, Britain moved to curb renewable
power subsidies. This comes after last Aprils
move to cut subsidies for onshore windfarms. The
estimated costs of subsidies is projected to be 9.1
billion pounds by 2020 versus a proposed budget of
7.6 billion pounds.

The contents of the Newsletter is not a recommendation, either implicit or explicit, to buy or sell emission permits.
Contact: David Boles, Compliance Markets -Direct: +3531 4433 584; Mob: +353 831747707
DBLM Solutions is partly funded by the Wicklow Enterprise Board.