Issue CCIV

Carbon Newsletter

DBLM Solutions
01 Oct 2015

Auctions
The EUA Dec14 contract is currently at 8.15.
The price bounced off a low of 7.87 on Tuesday
morning. Expect a moderate sell off as recent gains
manage resistance at 8.11. Keep in mind that the
price is tightly range bound for the last month
within the 20 cents above 8. Brent also looks to
push ahead now after making hardwork of progress
over the last 48 hours, adding support to the carbon
price.
Rising European power prices have also supprted
the carbon price. Volumes have also significantly
increased this week, more than doubling.

EEX held auctions last Thursday, Friday & Mon &

Tuesday. Auction prices were 7.99, 7.94, 7.92
& 7.87 respectively. The cover ratios for the
above auctions were 3.35, 4.03, 2.54 & 2.77
respectively. (Cover Ratio = Number of
bids/Auction Volume)

Transport sector
Analysts expect that the recent scandal at VW may
focus attention on the transport sector emissions
which currently account for 13% of European
emissions. The regulated emission limits for new
build motors are obviously circumvented. The
(Electric Vehicle) market continues to grow,
recently passing the 100,000 EVs on Irish roads. A
cap and trade which allows end users offset
associated emissions would go a long way to
adressing transport emissions. A similar solution
for the ag sector could aid nations in achieving
their legal emission targets.

Weekly
Recap

ICE
EUA
Spot

ICE CER
Spot

ICE
EUA
Dec15

ICE CER
Dec15

24/09/2015

8.00

0.52

8.01

0.51

25/09/2015

7.96

0.52

8.01

0.51

28/09/2015

7.90

0.52

7.92

0.51

29/09/2015

7.92

0.52

7.98

0.51

UK

30/09/2015

8.13

0.50

8.15

0.49

Volumes lots

3,960

796

113,186

884

Week %

1.62%

-3.84%

1.74%

-3.92%

The UK government have set their renewable

targets for the next couple of years. Power
producers must now submit 102 million ROCs
(renewable obligation certificates) for 2016/17,
rising from 86.8 million in 2015/16. ROCs provide
capital input to renewable projects within the
British Isles only. European states opting for their
own renewable target mechanisms. A heady mix of
tax, cap and trades, and subsidies.

The EUA/CER spread widened this week to 7.64,

at close of business last night versus the 7.54
spread we witnessed last week and 7.71 the week
before.

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.