W49: Price Chart

W48: EU ETS Price Graph

EUAs continue bull run, end week on an uncertain note  

The EUA Dec-22 contract was largely driven by technical signals as well as the looming option expiry while fundamental drivers played a minor role. Following last Thursday’s (24 Nov) sharp rise, notably breaking through the 100-day moving average, Friday (25 Nov) and Monday’s (28 Nov) sessions were marked by uncertainty as the market looked for direction. Tuesday’s (29 Nov) session provided such impetus with a strong auction, clearing with a 35 eurocent premium to the spot market. This, along with colder weather forecasts and lower renewable production, may have been drivers, however technical analysis indicators seemed to rule the day with prices breaching resistance levels at the 200-day moving average (EUR 79.47/t) and EUR 80/t. Without an auction on Wednesday (30 Nov), strong bullish sentiment pushed prices up further to EUR 84.69/t, buoyed by a lack of clear technical resistance and increased hedging behavior following colder weather forecasts. Thursday’s session (1 Dec) was marked by extreme volatility. The weakest auction of the week did not deter buyers, pushing prices intraday to a three-month high of EUR 88.75/t before reversing course and settling at EUR 85.22/t. The sharp spike and subsequent decline generated a gravestone doji candlestick, often a signal for trend reversals, leaving the continuation of the bull run in limbo. Carbon, gas, coal, and power prices all reacted to updated forecasts that indicated that temperatures would be milder than previously predicted.

On the policy side, Wednesday’s trilogues (30 Nov) covering EU ETS revisions and REPowerEU resulted in no new direction or guidance for the market. An announcement was made that a deal has been reached on maritime emission inclusion in the EU ETS, however it varies only slightly from the deal discussed in 

On the technical side, the Friday and Monday sessions saw an uncertain market, trading between the 100- and 200- day moving averages (76.91 and 79.47 respectively). The gravestone doji candle from 1 December could hint towards trend reversal which is supported by RSI’s close-to-overbought signal and trading outside the upper Bollinger Band as well as a resistance level at EUR 86.9/t.

Cold weather conditions will likely continue to be supportive of both energy and carbon prices, limiting any downside potential for the EUA Dec-22 contract. Forecasts predict temperatures 2-5C lower than normal earlier in the week but were adjusted to reflect milder temperatures on Wednesday (30 Nov). Additionally, wind generation is expected to be lower through December. The low temperatures and decreased renewables mix have supported energy complex prices. The Dutch TTF forward month contract fell on Monday (28 Nov) to EUR 132.286/MWh before rebounding sharply to finish at EUR 146.397/MWh on Wednesday (30 Nov). Following a steep rise early in Thursday’s session (1 Dec), the contract fell to EUR 139.258/MWh to close the day. German Cal-23 power followed up 13% from the previous Thursday (24 Nov), closing at EUR 386/MWh. API2 coal was not traded on Friday (25 Nov), but finished at USD 260.05/t, up 13.5% from 24 November.

The end of auctioning following 19 December and the Dec-22 contract expiry on the same day will also work against a more substantial price correction. Without much fundamental direction, technical signals will continue to dominate the market direction next week. Given that the EUA Dec-22 contract reversed significantly during the end of yesterday’s session amid corrections in power and gas markets, more profit-taking could be in the cards now, also in light of a slight upward revision of weather forecasts for next week. The Dec-22 contract has added around €16/t over the past two weeks, this looks like an attractive opportunity to cash in and polish some of the year-end balance sheets. Overall we are provide a neutral to bearish outlook for next week. We see the next support at EUR 82.58/t, followed by the 200-day moving average at EUR 79.37/t and the area between EUR 74.00/t and EUR 76.00/t.

For more information related to the EU ETS please contact henry@greenfact.com.

W48: RGGI Price Graph

Favorable court hearing for New England Energy Connect help keep low market prices

The RGGI V22 Future Dec-22 contract reached its lowest point in over a month on Wednesday (30 Nov), closing at USD 13.08/st (short ton). The contract settled at USD 13.19/st on Thursday (1 Dec), leaving a -1.71% price decline from last Thursday’s closing price of USD 13.42/st (24 Nov). The continued downward trend in the price is reflective of persistent warm weather in the region, reducing demand for power generation and heating. According to data provided by the Energy Information Administration (EIA), daily electricity demand has been relatively stable throughout the fall months with a sizable renewable energy output- namely hydropower and wind power, helping stabilize electricity prices and mitigating spikes in fossil fuel demand.

The dip in prices, most notably on 30 November, is attributed, in part, to the upcoming Auction 58 that will take place on 7 December. The increase in market activity and downward price trend is set to prepare and position market participants for the auction. The Quarter 4 auction has a projected allowance quantity of 22,333.203 Mst and is anticipated to be well-bid as many compliance entities in the RGGI member states are lacking the necessary allowances to cover current emissions.

Prices in the market may have also been impacted in response to the court ruling regarding New England Energy Connect’s (NECEC) transmission project in the region’s most northern state of Maine. The contested project seeks to install 145 miles of transmission lines through public forest into Maine from Quebec to bring 1,200 MW of electricity from hydropower into the New England grid. Maine’s supreme court ruled on the side of NECEC, discrediting any move to block the project on legal grounds. Although the legal roadblock still exists for the project, the court ruling entails a high probability of the project’s implementation. More information on the hearing can be found 

The volume of contracts traded on ICE this past week totaled 10.624 Mst, up 313.71% from the previous week’s total volume of 2.568 Mst. This spike in volume is reflective of increased long positions by compliance entities trying to settle their allowance needs before the year’s end. As market participants have begun to transition away from the Dec- 22 contract and reposition themselves for the Dec-23 contract, price declines for the current contract have continued.

The price of the RGGI V22 future Dec-22 will remain low leading up to the 07 December auction on Wednesday of next week. Market participants continue roll contracts over to the Dec- 23 contract and away from Dec-22 as the year is coming to an end the trend in low prices will persist. We expect the downward trend in prices to stabilize, and gradually reverse, as cold weather begins to settle in on the New England RGGI member states. According to 

, natural gas generation in New England is beginning to increase in line with the impending increase in energy demand during the winter months. The increase in thermal generation will drive demand for allowances by compliance entities and increase prices as a result.

RGGI will be conducting a Board of Directors meeting today (2 Dec) to approve of the 2023 budget and RGGI Executive Committee elections and discuss milestones. More information on the meeting agenda can be found 

For more information related to RGGI please contact luke@greenfact.com.

W48: WCI Price Graph

Post-auction allowance prices remain low, volume traded spikes

The week-on-week CCA V22 Future Dec- 22 contract is up 0.33%, closing at USD 26.96/t on Thursday (1 Dec). The contract reached its lowest price in the past eight months on Monday (28 Nov) closing at USD 25.90/t. Since Monday (28 Nov) the contract has risen 4.05% to the USD 26.95/t closing price on Thursday (1 Dec). Despite the gradual uptick since the start of the week, prices remain notably low for the market. The persistent low prices in the past week are due, in part, to the low auction clearing price (ACP) from Auction 33 that took place on 16 November. The low ACP has set a tone of low settlement prices following the auction results publication.

As market participants lean away from the Dec-22 contract and take long positions towards Dec-23, prices are expected to remain low. The low-price trend continues after the 2022 Scoping Plan’s release on 16 November, reflecting no short-term price increases in response to the plan, as well as market entities’ persistence to maintain low-price market transactions in anticipation of the plan’s implementation.

Contrary to trends in price, volumes traded spiked on Wednesday (30 Nov) reaching 30.837 Mt, the highest seen for the year. This spike is in line with long positions by compliance entities to ensure proper allowance obtainment before the year’s end. The spike in volume traded, in congruence with low market prices show market participants’ repositioning for 2023 and settling their CCA V22 future Dec-22 contracts as the year comes to an end.

Prices for the Dec. 22 contract will remain relatively low in the coming week. As market participants continue to realign with their 2023 outlooks and post-auction pressures persist, any variations in price will be minimal. Despite the 2022 Scoping Plan’s minimal short-term impact on price, low selling will not persist long-term as the plan’s initiatives begin to be implemented in 2024. Although not substantially, allowance prices are likely to increase as colder weather reaches WCI member states and fuel demand increases.

For more information related to WCI please contact luke@greenfact.com.

W48: Korea ETS Price Graph

Prolonged drop of spot contract with more KAU inflow looming over market

Spot-KAU22 price fell as much as 3.92 % week-on-week to KRW 15,950/t on Friday (2 Dec). The volume-weighted average price (VWAP) for November KAU22 contract was KRW 18,323/t, completing a third consecutive monthly decrease on Wednesday (30 Nov). The government’s upcoming plan to supply additional carbon permits into the market - the 12th allowance auction and the 4th certification committee - resulted in lower price in return. Nevertheless, November VAWP has not reached the lower bound of the trigger price (KRW 14,012/t) for the market stability measure.

two financial institutions have been newly designated as market makers

by the Korean government, meaning that in total seven non-ETS actors are allowed to participate in the market in 2023. For the sake of liquidity, each market-maker will be allowed to hold KAUs up to 500,000, which is increased from the previous 200,000 limits. Initially, the 200,000 cap was set as the government was wary of burdening ETS-regulated entities with price fluctuations. Compared to the total reserve assigned for the market-making purpose of 20 million tons or to the annual allocation of 589 million tons, however, the current upper limit of KAU going to financials is relatively small.

In the same press release, the government reiterated its plan to improve the Korea ETS. The aforementioned market stability measure has long been criticized for its unpredictability due to the governmental discretion in deciding the enactment. The government promised to solve this uncertainty issue by, including but not limited to, setting up the rules for imposing the relevant measure. Also, the government briefly mentioned that its work on introducing consignment auctions and a futures contract is in progress. The first feasibility study on a CO2 futures market was put out to the government tender in February 2022, targeting to launch a futures market in the Korea ETS phase 3 (2021-2025).

For more information related to the Korean ETS please contact seul@greenfact.com.

W48: VCM Price Graph

Carbon auctions as a strategy to minimize administrative costs

Nature-based contracts are still leading the price compared to the technology-based contracts, with this Thursday’s (01 Dec) closing price of USD 5.47/t for the Nature-Based Global Emissions Offset (NGO) future Dec-22 contract on CME. This is followed by the Global Emissions Offset (GEO) closing price of USD 3.11/t and the Core Global Emissions Offset (CGO) closing at USD 1.52/t. The price for CBL’s CGO rose steadily during the week, with the closing price of USD 1.48/t on Monday (28 Nov) and USD 1.52/t on Thursday (01 Dec), resulting in a week-on-week change of plus 3%. Meanwhile, the same progress was not seen in the other two contracts, as the CBL’s GEO CORSIA and CBL’s N-GEO nature benchmark contract prices continued to slip and stagnate at -1% and 0% respectively week-on-week.

One of the biggest trading platforms, Xpansiv market CBL, announced this week the launching of a new 

. The first auction will be held in the first quarter of 2023 for approximately 400,000 VCUs of a REDD+ project registered in Verra. Like CBL, the operator ICE had previously announced its intention to carry out an auction in December this year. The auction will be for 250,000 VCUs of a natural climate solution (NCS) project registered in ACR. These auctions show a clear movement by the major carbon credit trading platforms in an attempt to reduce their administrative costs.

Air Carbon (ACX) and Climate ImpactX (CIX) also held auctions in early November, for 300,000 VCUs from a LED lightbulbs project in India and 250,000 of blue carbon VCUs respectively. The auctions are more fit to companies and buyers who prefer a more standardized, rather than tailored, option. More regular auctions are expected to be held in early 2023.

Carbon Removal Certification Framework (CRCF) proposal

. The proposal could create prospects for supply and demand in the future since the criteria for industrial carbon capture and storage are aligned with current VCS methodology.

In the middle of this week (Nov 30) the interface between the Carbon Trade Exchange (

) and the Indian Universal Carbon Registry (

), known for its hybrid blockchain technology solution, was announced. The inclusion of one more record on the platform will increase the supply of carbon credits, mainly from technologies such as NCS and energy.

Furthering on the topic of blockchain, the 

calls into question the capacity of Regenerative Finances (ReFi) to tackle climate change. A crypto market crash always brings huge volatility to the market, which means that trading platforms that work with tokenization offsets such as AirCarbon Exchange (ACX), Toucan, Regen Network, and Moss better buckle up and prepare for a turmoil in the market for encrypted carbon credits. Traders can profit from this once the prices of tokens might be jumping up and down throughout the day.

It is expected that the voluntary market will stay stagnant until the end of 2022. Although we have seen an exponential increase in the number of committed companies to the SBTi, it is expected that this commitment will not be reflected in the market anytime soon. The recent developments in the VCM that are coming out (

UN High Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities

more detailed guidance on neutralization and beyond value chain mitigation

) might have put the corporate demand on hold as companies are waiting for more concrete guidelines on how to claim their offsets.

For more information related to voluntary carbon market please contact fitri@greenfact.com or stephannie@greenfact.com.

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Carbon markets - Week 48: EU ETS reaches three-month high, ends week on uncertain note

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