Carbon Market Weekly 17-21 November

European carbon prices took a bullish trend after the market received positive signals from EU policy developments with regards to the market stability reserve (MSR) proposal. On Monday the release of the rapporteur’s amendments to the proposal in the environment committee (ENVI) began to push the price higher, as the proposal supported the MSR as such and proposed that the backloaded allowances be placed in the reserve, Reuters Point Carbon reported. In comments to the media, ENVI rapporteur Ivo Belet explained the proposal as an attempt to represent the current compromise in his committee, adding that the text does not rule out an earlier start which may be proposed by other Parliamentarians. In late Monday an exchange of views on the MSR in the Parliament’s industry committee (ITRE) took place, showing a general support for the proposal, with most members of the EPP and ECR parties in favor of the proposal of ITRE rapporteur Antonio Tajani. Members from the Greens, S&D and ALDE groups suggested to start the MSR early and to move the backloaded allowances in the reserve, Reuters said.According to Point Carbon data, on Tuesday the carbon price continued to climb, breaking through the psychologically important €7/t level. The rest of the week was characterized by consolidation, balancing some profit taking and increased hedging demand by utilities. The EUA Dec-14 closed on Friday at €7/t, up €0.38/t (+5.74%) from the previous Friday’s finish. The legislative process regarding the MSR is likely to affect the EU carbon  market over the next month, thus we will keep a closer look at the next meeting of the EU Parliament’s committes appointed for the adoption of the mechanism (main dates also on CPO Climate Agenda):

3-4 December: ENVI Committee ENVI to considerer the rapporteur’s draft report on the MSR

3-4 December: ITRE Committee Exchange of views on the amendments to the ITRE rapporteurs’ opinion on the MSR proposal

11 December: deadline for amendments to MSR draft report by ENVI MEPs

17 December: Environment Council, a draft conclusion on the MSR could be adopted.

21 January: ITRE committee Committee to vote on MSR file.

21-22 January: ENVI meeting will cosider amendments to the MSR draft report

23-24 February: ENVI will vote on the MSR file for adoption of a final ENVI report for consideration of the Plenary.


In the UN-backed CDM market, the CER contract for December 2014 loose €0.01/t (-11.11%) week-on-week and closed at €0.08/t.