Innovate4Climate 2018

Casiana Fometescu, international consultant on CO2 issues from Carbon Expert has attended Innovate4Climate conference, which took place last week in Frankfurt, on 22-24 May 2018 in Kap Europa Congress Centre.

This year, Innovate4Climate has been the place where finance, business, technology, and policy leaders met to drive climate investment in future carbon low technology.

Climate action at unprecedented speed and scale is essential for making the investments required to avoid the effects of a 2 degree warmer world and meet the Paris climate commitments. In a world of constrained public resources, traditional forms of concessional finance will not be sufficient to fund the investment required for a transition to a low-carbon future. Scaling up and accelerating access to finance – from multiple sources, as efficiently and effectively as possible – to redirect the trillions of dollars sitting in unproductive, low yielding as well as unsustainable investments towards longer-term, climate-smart investments will be key.

Innovate4Climate 2018 has convened global leaders from industry, government and multi-lateral agencies for a one-day high level Summit, and two days workshops and a Marketplace, to work and dialogue on development of innovative financing instruments and approaches to support low-carbon, climate-resilient development pathways; mobilization of private investments in climate action; support to developing countries in their NDCs implementation; development of ideas on how market-based and non-market based climate finance instruments identified in the Paris Agreement can best be designed to maximize impact and minimize costs.

For more information on how to calculate and reduce the company’s carbon footprint and get funding for your investment plan in technologies that increase the company’s energy efficiency, please contact us. Also, if your project already involves a significant reduction in CO2 emissions in the atmosphere, we can help you get carbon credits for these CO2 emission reductions.

The Carbon Market 24.05.2018

CO2 emissions covered under the EU ETS rose by 0.3% in 2017, according to EU ETS verified data for 2017 published by the European Commission on 19th May 2018, confirming the small increase both reported in preliminary data released in April and predicted by analysts.

An increase had been widely forecast due mainly to increased coal generation as nuclear plants suffered reliability problems and hydro generation was very low in many parts of Europe. Yet, carbon price has risen almost double since the start of 2018 while oil, power, and natural gas are all 20% higher than they were at the beginning of 2018.

While the EU compliance was reaching its climax, the speculative trades continued to support the European carbon market, betting on higher prices in the coming months. April’s open interest in call options for December 2018 EUAs has risen to 207 million tones CO2, while put options show a total of 139 million tones CO2.

Analysts in mid-April raised their price forecasts for 2018 by around 30%, especially because of this speculative element of the CO2 market, which continues in May, as well.

Yesterday, 23.05.2018, EUA closed up at Eur 16.01, the highest level since 2011, after a long steady recovery. This consolidation may give traders encouragement to add length, and given the scale of recent price moves, this may bring more rise of the price into play.

At the same time, on 15th May 2018, the European Commission published the Total Number of Allowances in Circulation into the EU ETS (TNAC), which amounts to 1,654,574,598 allowances.

This means that between 1 January 2019 and 31 August 2019 264,731,936 allowances will be withheld from EU ETS auctions and placed in the Market Stability Reserve (MSR). This represents 16% of the TNAC over this 8 month period.

When the MSR starts operating in 2019, it will absorb each year 24% of the allowances in circulation if this figure is above 833 million allowances. From 2024 onwards the intake rate declines to 12%. The first review of the functioning of the MSR is scheduled to take place in 2021.

The Market Stability Reserve is another reason for the CO2 price increase together with the speculative trend.

Given these moves and forecasts, forward transactions we highly recommend Romanian installations to secure the price for the expected CO2 trades. This means that the price is locked up at the current level while payment is done at an agreed future time, possibly closed to the next surrender.

The Italian company, Aither CO2 has entered for the first time, this year, into Romanian carbon market, helped by the Romanian consultancy Carbon Expert. They won both tenders at BRM exchange as well as state and private company tenders, with revenue on the Romanian CO2 market of more than 12 milion Euro.

We are looking forward to seeing your interest in forward transactions due to the current risen trend of the EUA price.

The Carbon Market 02.05.2018

The ICE exchange from London trades today as follows:

EUA spot: € 13.14
EUA Dec ’18 futures: € 13.16
CER Dec’18 futures: € 0.20

Brent Crude futures Dec’18: $ 70.59

German energy Aug’18: € 43.72

According to Carbon Tracker report below, the price of the EUA certificate continues to rise as a result of the implementation of the European legislation regarding the Market Stability Reserve: 20 Euro/tCO2 in 2019 and 25-30 Euro/tCO2 in 2020-2021.

Source: Carbon Tracker, April 2018