The CO2 Market – 07.09.2021

EUA sets  new record high: 63 euro/tCO2

EUA prices surged their fifth record in seven sessions on Monday, 06.09.2021, while gas and power also reached new all-time highs, as speculation over gas flows from Russia continued to dominate the European energy complex. Thus, carbon prices were supported by increased gas prices, which gave corresponding signals out of concerns about the supply from Russia and the new Nord Stream 2 pipeline.

The prices for CO2 emission rights jumped above the 60 euro mark for the first time in the last trading week and defended them until the end of the trading week on 3rd September. On Monday morning, 6th September, the market opened with a clearly positive signal, having already exceeded the mark of 63 euros per EUA in early trading. At the time of writing (7th September, 10.00h), EUA is 62,07 on the ICE ECX exchange.

The fact that the normal volume of 11,418,000 EUA has been up for auction this week has not yet slowed the market down, but demand for the auctions should remain interesting.

Beatriz Yordi, Director of the European Commission for European and International CO2 Markets, commented at a video conference on the latest reform of the EU emissions trading system in relation to last week’s price increase, saying that “the market is working and that a corresponding decarbonisation send a signal to the economy.” In addition, Yordi said that “you have to stay calm at the current prices above 60 euros. Market intervention to lower prices is therefore currently unlikely, even if it would certainly find supporters in some EU countries”. We wonder how managers of polluter companies have such a calm attitude when they know that they need to buy hundreds of thousands of CO2 allowances.

Source: Carbon Pulse, London & Advantag Brokerage, Germany