Friday spotlight: Carbon gains ground ahead of compliance

25 April 2014 14:22 Source:ICIS

Carbon prices had another bullish week to break to a three-week high on Tuesday, according to ICIS data, which was then surpassed on Thursday.

After a long weekend, EU allowances began the week on a strong note, as companies swept into the emissions trading system (ETS) have started to buy allowances to cover an expected shortfall later in phase III.

This extended last week’s bullishness, when carbon prices climbed by around 8% over 10- 17 April, as looming supply cuts helped prop up prices in the run-up to the Easter holidays in Europe.

Next week, companies will have to submit allowances to match their 2013 emission, but this provided little extra demand as most companies have already covered this.

There were some losses following the regular auctions held by the European Commission to sell fresh phase III allowance supply, but overall the benchmark contract closed up 4.5% week on week, as an intra-week high on Thursday of €5.80/tCO2e. This was the highest closing price for the benchmark since 26 March, according to ICIS data. Marie-Louise du Bois

By Marie-Louise du Bois