Issue LXXXVIII

Carbon Newsletter

DBLM Solutions
18 July 2013 The EUA Dec13 contract is currently at 4.12. The carbon market traded within a 10 cents range as traders arent quite sure what to expect. The facts remain that the supply into the market continues unabated with a staggering 18,538,500 EUAs hitting the market from auctions this week.
Weekly Recap ICE EUA Spot 0 ICE CER Spot 0.53 0.53 0.52 0.51 0.51 0 ICE EUA Dec13 4.09 4.04 4.05 4.13 4.13 52,209 -3.77% ICE CER Dec13 0.54 0.55 0.53 0.52 0.53 1,187 -1.85%

Union Registry
The Union registry reopens this morning at 08:00 CET. Rules related to the holding of UN credits will be upgraded. Notably, it will allow account holders to distinguish between UN offsets that are eligible for the EUETS and those that are not. UN offsets will be labelled as either eligible or pending/ineligible. Units marked as the latter cannot be transferred to Union registry accounts but can be transferred to Kyoto protocol acounts. The transfer to Kyoto protocol accounts is scheduled for sometime in Autumn 2013. The exact timing of this operation will be published on the 15 September 2013. The ability to exchange eligible UN credits for allowances will become legally possible after member states have submitted an international credit entitlement table. If there is no objections , member states will have this done no later than 10 November 2013. Yesterday, the European Commission cleared a German state aid support scheme for energy intensive users affected by higher electricity prices under the EUETS and rejected a similar scheme for non ferrous metal producers. Power producers can pass this cost onto end users, but Germany notified the commission earlier this year of their intentions to take some of the pressure from end users through the use of subsidies. Germany's 2013 scheme "would effectively prevent carbon leakage while keeping competition distortions to a minimum," the EC said. The non ferrous producers were refused subsidies on the grounds that it would only benefit 11 German aluminium, copper and zinc producers to the detriment of other facilities within the EU bloc. A risk of carbon leakage was not proven by the applicants.

11/07/2013 12/07/2013 15/07/2013 16/07/2013 17/07/2013 Volumes lots Week %

The EUA/CER spread widened this week to 3.60 at close of business last night versus the 3.53 spread we witnessed the week before and 3.91 the previous week.

Auctions
EEX held auctions last Thursday, Friday, Monday and Tuesday,auction prices were 4.06, 3.95, 3.99 and 4.11 respectively. The cover ratios for the above auctions were 2.30,1.86,3.02,4.97 & 3.71 respectively.(Cover ratio Amount of bids/actual auction volume). ICE also held their fortnightly auction, selling 4,134,000 EUAs at 4.06 each. In total an extra 18,538,500 EUAs were brought to the market place.

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:00353 831744707 DBLM Solutions is partly funded by the Wicklow Enterprise Board.