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Carbon Update 07 June 2013

Carbon Update 07 June 2013

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Published by David Boles

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Published by: David Boles on Jun 10, 2013
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DBLM Solutions

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

DBLM Solutions Carbon Update
Carbon Overview

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

At time of writing the Dec '13 EUA Contract was at €4.15. The carbon market closed yesterday at a seven week high amid renewed hope that market intervention will proceed through a successful vote on 'backloading' in early July. Prices are also buoyed by a bullish energy complex. On Wednesday, the European Commission proposed to set the quota for UN offset compliance use at the lowest level allowed by law after imports aggravated a surplus of EUA's in the EUETS. The draft regulation published on Wednesday allows fixed installations utilise a 11% quotient for compliance purposes for the period 2008-2020. The Phase 2 National allocation plan quotient may also be used if higher. The significance of this lies in the fact that the commission have decided not to use an option provided that would have allowed an increase in UN offset quotient use for compliance purposes. Emitters that entered the EUETS after 2008, under the proposed regulation would have an offset quotient of 4.5% of verified emissions through Phase 3. The proposed regulation also proposes a change for airline UN offset use for phase 3. If the draft regulation is passed, airlines may use only 1.5% UN offsets for compliance purposes. Firstly, the proposal needs approval by National officials in the climate change commitee, followed by a three-month scrutiny by the European Parliament and EU ministers, to enter into force. Member states would be afforded a month to calculate offset limits at an installation level. This means that participants will not know how many UN offsets they can use until the end of 2013 as several months are needed for the new regulation to come into force.
Dec 13 EUA

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