Key Greenhouse Gas Emissions Data Set To Boost Prices On The European Climate Exchange

April 3, 2008 at 9:38 am Leave a comment

European carbon traders are eagerly awaiting benchmark numbers on European greenhouse gas emissions during 2007. European countries ought to have submitted the data in a central system yesterday but many failed to meet the deadline. banner_environment_en.jpg

That is why the Brussels authorities in charge of the central system have not yet released the information on the Community Independent Transaction Log (CITL), the central system. The numbers are key because they allow market traders to know the right level of demand for the instruments they trade.

EU regulations mandate that energy-intensive companies involved in carbon offsets submit one emissions permit for every ton of carbon dioxide emissions they create. The permits are called EU Allowances (EUAs) and since 2005 there’s been a healthy trade in them. Traders have created futures and options derived from the EUAs. Volumes as well as the prices on the European Climate Exchange have been going through the roof in the past year. During March 2008, almost 120 million tonnes EUAs were traded, an increase of 61% compared to March 2007.

Reuters interviewed a Deutsche Bank analyst, Mark Lewis, about his expectations for the 2007 emissions levels. Lewis expects 2007 carbon dioxide emissions to be between 2,180-2,220 million tons. 2007 levels were between 2,100-2,140 million tons.

The 2008 permit supply is 2,083 million tons, which means there’s a shortage of supply. EUA prices will likely rock once the data is released. Lewis estimates the price is likely to go up to 35 euros per ton during 2008-12. Last Friday, EUA futures contracts were trading down 14 cents at 22.12 euros ($34.87).

During the first phase of the carbon market (2005-2007) trading was characterized by an oversupply of permits which caused the carbon price to fall.

The UK has independently already released its estimates for 2007 emissions levels. Government officials published provisional figures showing UK emission levels reached 639.4 million tonnes, which was 2 percent lower than the 2006.

The authorities in charge of CITL reported that not enough data had been submitted for them to release it. At least 80% of the data entered for the 2006 emissions needs to have been reported before the numbers will be released. This is so the markets don’t trade on false information.

CITL announced that it won’t ‘give public access to installation-level verified emissions data today [April 1]’. Instead, the data will be released as soon as enough submissions have been registered to make the 80% grade.
The officials in charge will release the numbers until at least 80% of the data that was submitted in 2006 has been entered.

Angelique van Engelen writes http://Amplifiedgreen.wordpress.com, a blog about micro green options, macro perspectives.

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Entry filed under: Green Concepts Explained, Green Economics, Green Marketing, Green News, The Planet's Resources. Tags: , , , , , , , .

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