The International CO2 Market

Brexit Effects on the EUA Price

Brexit is coming into force, officially starting  on 1st February 2020. The country will enter a transaction period valid until the end of 2020. According to this, UK has been in EU ETS for the whole 2019 and only for 1 month of 2020. UK will most likely has to comply for 2019. In this case it has to issue also the free allocation and the auctionable EUAs. Depending on how fast it will release all those EUAs, it might be that the market will have an impact on the downside.

UK could issue EUAs in two different way: tagged EUAs or untagged. In the first case, EUAs won’t overflow the market. In the second case it might be the case.

In case no issuance at all happens and the UK only does a UK carbon tax, no overflow will happen and the market will grow up to 25 eur/ton.

There are still a lot of uncertainties, in any case the market deep achieved in these days can be a good buy opportunity for short industrials that has to buy for compliance.

The EUA price closed yesterday on the ICE ECX exchange from London, 03.02.2020 at Eur 23,12.

Tighter market in 2021 will attract investors back to EU carbon -analysts

EU carbon allowances will struggle to rise much beyond current levels until later this year, when a return of speculative investors eyeing a tighter balance in 2021 could propel prices to a record above €30, analysts predict, citing early signs of buyers potentially returning.

World’s carbon markets grow 34% in value to $215 billion in 2019 -report

Published 02:34 on January 22, 2020  /  Last updated at 16:45 on January 23, 2020  /  Africa, Americas, Asia Pacific, Australia, Aviation/CORSIA, Canada, Carbon Taxes, China, China’s National ETS, China’s Offset Market, China’s Pilot Markets, EMEA, EU ETS, International, Kyoto Mechanisms, Mexico, Middle East, New Market Mechanisms, New Zealand, Other APAC, South & Central, South Korea, Switzerland, US  /  No Comments

Global carbon markets grew by 34% in 2019 to hit €194 billion ($215.1 bln) in value, according to analysts at Refinitiv, marking a third straight year of growth and a nearly fivefold increase in two years.

In a report published Wednesday, the company said the value of almost every major carbon market worldwide had increased markedly year-on-year, in spite of overall trading volumes dipping by some 370 million tonnes or 4% to 8.73 billion tonnes.

A surge in allowance prices in the EU ETS was the primary driver for the rise in global carbon markets’ value, with the average jumping by some €9 to near €25 between 2018 and 2019.

The European carbon market – the world’s largest by volume and value – rose in worth by 30% to €169 billion to make up by far the largest share of the global total, despite a 12% drop in traded EUA and EU Aviation Allowance (EUAA) volumes to 6.78 billion.

Source: Rueters Point Carbon, London & IETA, Geneva

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