Issue XCVII

The EUA Dec’13 contract is currently at €5.76. The contract closed at €5.87 last night, an eight month high. Technicals show that is close to a near term high and some retracement is on the cards over the coming days. The energy complex remains flat to bullish with Brent starting what looks like a bullish run after shedding close to €6 over the last week. The main reason given for carbon’s bullish momentum is attributed to the supply break, i.e no auctions today, with the first polish auction on monday having no impact on price. This should be watched closely as I have outlined in the past any failed auctions will have a negative effect on carbon prices. The media has commented that carbon climbs despite supply influx, so commercials should be on the ready when the land finally comes.
Weekly Recap 11/09/2013 12/09/2013 13/09/2013 16/092013 17/09/2013 Volumes lots Week % ICE EUA ICE CER ICE EUA Spot Spot Dec’13 ICE CER Dec’13

spread we witnessed the week before and €3.99 the previous week.

Auctions
EEX held auctions last Thursday, Friday, Monday and Tuesday,auction prices were €5.30, €5.37,€5.38 & 5.44 respectively. In addition, the first Polish auction was held on Monday, where 3,661,000 EUA’s were sold at 5.42 each. The cover ratios for the above auctions were 3.71, 2.83, 1.61 & 3.72 respectively (Cover ratio – Amount of bids/actual auction volume) In total an extra 18,06,500 EUA’s were brought to the market place. On Monday, the European Commission stated that EUETS participants including aircraft operators will legally be allowed to exchange eligible international credits (CER’s and ERU’s) for EUA’s as early as February 2014. Access to the Union Registry will be suspended for a maximum of three working days in the course of January 2014 to deploy the technical functionality for the exchange. The exact dates of the downtime will be communicated in December.

5.25 5.61 5.39 5.46 5.66 509 %

0.63 0.68 0.69 0.69 0.71 0 %

5.28 5.63 5.41 5.48 5.68 103,148 %

0.61 0.66 0.67 0.67 0.69 4,447 %

UN offsets
The European Commission has announced that they will delay the publication of which of the 700 million ERU’s remain eligible for the EUETS. Analysts have stated that the publication of this data may result in ERU’s halving in value. ERU’s are currently priced at €0.37. This may prove to be an opportunity for commercials to optimise their carbon asset.

The EUA/CER spread widened this week to €4.95 at close of business last night versus the €4.62

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.

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