Issue XCIII

Carbon Newsletter

DBLM Solutions
22 August 2013 The EUA Dec13 contract is currently at 4.36. The carbon price closed yesterday at the highest level seen in the last eight sessions. Carbon looks like it will climb in the short term, however it may be worth determining demand at this mornings EEX auction to gauge sentiment. The UN offset market has shown a small spark of life as 2,000 spot CERs were sold on ICE exchange yesterday, after a period of over two weeks when none were sold. If we look at German and French baseloads for a signal of Carbon price directions, we find French spot baseload today at 36.67, down from 37.00 /MWh. German spot power is at 35.36, up from 34.36 /MWh. The intraday chart shows a downward move for Germany power whilst the equivalent French chart is flat for the rest of the day.
Weekly Recap ICE EUA Spot 4.34 4.34 4.31 4.33 4.35 431 0.23% ICE CER Spot 0.61 0.62 0.62 0.60 0.61 2 0 ICE EUA Dec13 4.37 4.37 4.34 4.36 4.38 41,734 0.22% ICE CER Dec13 0.60 0.61 0.61 0.60 0.60 4,373 0

spread we witnessed the week before and 3.75 the previous week.

Auctions
EEX held auctions last Thursday, Friday, Monday and Tuesday,auction prices were 4.28, 4.33, 4.31 and 4.28 respectively. each. The cover ratios for the above auctions were 3.32, 4.26, 3.65 & 3.90 respectively (Cover ratio Amount of bids/actual auction volume In total an extra 7,315,500 EUAs were brought to the market place.

Global ETSs
Carbon prices on Chinas first GHG emission trading scheme in the Shenzhen region has increased by 23% in the last two weeks. Shenzhen carbon allowances hit 43 yuan($7) on Tuesday, up from 28 yuan on June 18 which was the first day of trading. Reasons cited is individuals opening accounts and buying all surplus credits available. Even though the regions volume is small compared to the EUETS, the 2013 December contract is now priced 20% higher than the European equivalent. Chinas seven CO2 markets, including Shanghai, Beijing, Guangdong, Tianjin, Chongqing and Hubei, are set to regulate 800 million to 1 billion tons of emissions by 2015 in the worlds biggest cap- and-trade program after Europes. The Californian cap and trade held their auction last Friday. A price of $12.22/ tonne was achieved. The price is down 13% from the previous sale in May. The Californian- EUETS spread has shrunk by 10% in the last month to the narrowest level since last February. The Air resource board stated on July 18 they may raise free allowance issuance by one third to counter higher costs and job losses. A flexibility not afforded to the EUETS.

15/08/2013 16/08/2013 19/08/2013 20/08/2013 21/08/2013 Volumes lots Week %

The EUA/CER spread narrowed this week to 3.74 at close of business last night versus the 3.78

The contents of the Newsletter is not a recommendation, either implicit or explicit, to buy or sell emission permits. Contact: David Boles, Compliance Markets -Direct: +3531 4433 584; Mob:00353 831744707 DBLM Solutions is partly funded by the Wicklow Enterprise Board.