Issue CCIX

Carbon Newsletter

DBLM Solutions
05 Nov 2015

The EUA Dec14 contract is currently at 8.40.

Technicals show carbon to be bearish at the
moment, currently showing good support, the
second resistence level is at 8.26, followed by
8.05. Note, yesterdays auction on EEX showed
high demand, and a similar figure at this mornings
auction could support the carbon price.
Weekly
Recap

ICE
EUA
Spot

ICE CER
Spot

ICE
EUA
Dec15

ICE CER
Dec15

29/10/2015

8.64

0.61

8.67

0.60

30/10/2015

8.66

0.63

8.64

0.63

02/11/2015

8.59

0.63

8.61

0.63

03/11/2015

8.46

0.63

8.46

0.63

04/11/2015

8.39

0.63

8.39

0.61

Volumes lots

3,088

25

64,116

1440

-2.89%

3.27%

-3.22%

1.66%

Week %

The EUA/CER spread narrowed this week to

7.76, at close of business last night versus the
7.92 spread we witnessed last week and 7.88 the
week before.

Auctions
EEX held auctions last Thursday, Friday & Mon,
Tuesday & Wednesday. Auction prices were
8.59, 8.59, 8.54 & 8.58 respectively. The
cover ratios for the above auctions were 2.48, 2.85,
4.04 & 2.71 respectively. (Cover Ratio = Number
of bids/Auction Volume)

China
China, the world's biggest source of heat-trapping
greenhouse gases, will impose tougher penalties on
firms that fail to comply with emission targets,
according to draft market regulations.
Firms will be fined at a rate of three to five times
the average carbon price over the previous trading
year for each permit they fail to surrender to
authorities, and they will also have their permit
allocations for the following year cut by a
corresponding volume.
They will be subject to additional penalties for
every day they delay paying the fine.
The rules also call for the formulation of unified
national standards for data reporting, accounting
and trading, and proposes fines of up to 1 million
yuan ($157,257) to punish misreporting from data
verifiers.
As well as spot traded permits and carbon offset
credits, the new rules allow for the launch of
carbon futures. The draft also specifies that funds
raised from auctioned permits should be used for
carbon reduction activities.
It remains unclear whether permits now being
traded in seven pilot schemes will be tradable in the
new nationwide regime. The draft also provided no
details about the level at which carbon will be
capped in any future market.
The new rules provide the legal basis for the
regulator, the National Development and Reform
Commission (NDRC), to cap company emissions.

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.