Issue LXVIII

Carbon Newsletter

DBLM Solutions
14 Feb 2013 Dec 13 EUAs have grown steadily, reaching 5.37 at time of writing. The rise is attributed the EU Parliament commitee vote on market support next Tuesday. This is only the first step in a long drawn out process before any reforms are actually introduced. The worry is that the EUETS will fragment and this can already be seen with Britain introducing a carbon price floor from April. (The proposed floor price is set at around 16 pounds) A carbon price of 40 is needed to allow for the adoption of renewables in order to meet mitigation targets set for 2020 and beyond. The above floor price is set to add $1.25 billion to utilities bottom line, which will be duly passed onto the end user.
Weekly Recap ICE EUA Spot 4.09 4.43 4.36 4.46 5.10 818 24.69% ICE CER Spot 0.12 0.13 0.13 0.13 0.13 63 8.33% ICE EUA Dec13 4.20 4.55 4.48 4.58 5.23 151,262 24.52% ICE CER Dec13 0.33 0.34 0.35 0.33 0.32 3,078 -3.03%

The EUA/CER spread widened this week to 4.97 at close of business last night versus the 3.57 spread we witnessed the week before and 4.51 the previous week.

Auctions
EEX held auctions last Thursday, Friday, Monday and Tuesday, auction prices were 4.24, 4.32, 4.19 & 4.44 were achieved respectively bringing an additional 15,441,000 EUAs to market. The cover ratios for the above auctions were 3.18, 2.33, 3.08 and 3.32 respectively. Yesterday ICE helds its fortnightly auction of 4,134,000 EUAs achieving a price of 4.57 each.

US
It has long been known that The United States must take a lead on Climate Change for the global regime to make any substantial progress. On Tuesday, President Obama didnt mince his words when he declared that if congress do not get behind him regarding Climate Change, the White House would go it alone. "If Congress won't act soon to protect future generations, I will," Obama said in his State of the Union address. "I will direct my Cabinet to come up with executive actions we can take, now and in the future, to reduce pollution, prepare our communities for the consequences of climate change, and speed the transition to more sustainable sources of energy." More positive news from the US has seen the Regional Greenhouse Gas Initiative announcing plans to tighten their cap. The seven states involved reacted by the price on their allowances hitting a seven month high.,

07/02/2013 08/02/2013 11/02/2013 12/02/2013 13/02/2013 Volumes lots Week %

The alternative to the ETS is a carbon tax which has been introduced on a limited basis in Denmark, Finland, Germany, Ireland, Sweden and Norway and Italy proposed a change to a tax system last year but the proposal failed to gain any traction.

The contents of the Newsletter is not a recommendation, either implicit or explicit, to buy or sell emission permits. Contact: David Boles, Compliance Markets - M: +353 86 160 2115 L: +3531 4433 584. DBLM Solutions is partly funded by the Wicklow Enterprise Board.