Issue CXXIII

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Carbon Newsletter
DBLM Solutions
17 July 2014


The EUA Dec13 contract is currently at
6.05.The European power markets are rising on
idle wind and increasing temperatures. The hotter
weather is likely to increase air conditioning use
and a rise of 30 cents was witnessed on German
baseload yesterday. French power jumped by 2.
Carbon is often highly correlated to European
power prices which should offer support to carbon
prices in the short term.
Weekly
Recap
ICE
EUA
Spot
ICE CER
Spot
ICE
EUA
Dec13
ICE CER
Dec13
10/07/2014 5.74 0.14 5.71 0.14
11/07/2014 5.72 0.15 5.75 0.16
14/07/2014 5.70 0.15 5.91 0.15
15/07/2014 5.91 0.15 5.96 0.15
16/07/2014 5.99 0.15 6.06 0.15
Volumes lots 721 0 60,318 1,827
Week %

4.35% 7.14% 6.13% 7.14%
The EUA/CER spread widened this week to 5.84,
at close of business last night versus the 5.61
spread we witnessed last week and 5.87 the week
before.
Yesterday, it emerged that Britain are seeking deeper
carbon market reforms than Germany have recently
initiated. They are seeking the cancellation of
hundreds of millions of credits instead of the carbon
reserve reform being pushed by Germany.

Some expected that the European Environmental
commitee would initiate discussions on Carbon
market reform next week but a draft agenda published
on Tuesday has not scheduled for any such talks. This
should cause some resistence to further bullish
movement in the medium term.
Auctions
EEX held auctions last Thursday, Friday, Monday
& Tuesday Auction prices were 5.72, 5.64,
5.70, & 5.88 respectively. The cover ratios for
the above auctions were 5.25, 4.78, 4.17 & 4.75
respectively.
Australia
The global carbon market hit a setback yesterday
as the Austalian Government cancelled their carbon
cap and trade scheme which was due to start next
year. There is also ominous signs surrounding the
New Zealand emission trading scheme as pollsters
campaign on the basis of scrapping their emission
trading scheme in favour of a carbon tax system.
Election results in October will seal the faith of the
NZETS. Plans to link trading schemes, namely
Australia to the the EUETS must now be
postponed, dashing hopes of a global carbon price.
The European Australia link until recently was
heralded as a test case with links between China
and the US to follow. This is a major blow as
Australia would have been the third largest ETS
after Europe and China. Europe saw the Australia
ETS as part solution for their oversupply issue
creating extra demand for excess credits.