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 3.77.Last Friday, we witnessed the largest ever weekly gain. Angel Merckel declared that something needed to be done about the state of the market and the issue will be addressed immediately after the German elections in September.The price hit a high of 3.97 in the last hour of yesterday's session. The energy complex looks to be on the rise as well, Brent rising on positive US data and German and French baseloads rising only slightly. The Carbon forward curve benefited most from her comments. Dec '13 to Dec'20 is 3.91,4.08, 4.23, 4.39,4.54,4.71,4.98 & 5.27 respectively. Alot healthier than we have seen in the recent past. Today, the European Parliament's environment commitee will consider a date for the second reading of the backloading proposal. The main problem is that Industry sees carbon trading as a burden, whereas in reality industries could use the market to create real competitive advantage. The weak price at the moment is inducing greater use of coal which emits twice as muvh GHG as Natural gas. For instance,utilities such as RWE IN Essen, Germany and Warsaw based PGE SA are benefitting over utilities that derive energy from wind,natural gas and Uranium, firms such as EON SE, GDF Suez and CEZ AS in Prague.
Dec 13 EUA

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