Issue LXXXVI

Carbon Newsletter

DBLM Solutions
04 July 2013
The EUA Dec13 contract is currently at 4.64. The backloading issue is finally put to bed after a successful vote yesterday allowed the measure to go through. The final vote on backloading passed 344 to 311; while amendment 21 was passed by 346 votes to 308, which requires the commission to limit backloading to a one-off intervention.We now have to go through the final step of gaining agreement from member states and then 900 million allowances will be temporarily taken from the cap and trade. Talk has immediately shifted towards EUETS reforms as many analysts declare that yesterdays actions is only a sticking plaster. The proposed refroms are attached.
Weekly Recap ICE EUA Spot 4.39 ICE CER Spot 0.49 0.50 0.51 0.52 0.56 0 14.28% ICE EUA Dec13 4.43 4.21 4.24 4.29 4.69 105,552 5.86% ICE CER Dec13 0.49 0.52 0.51 0.52 0.56 5,260 14.28%

The EUA/CER spread widened this week to 3.13 at close of business last night versus the 3.91 spread we witnessed the week before and 3.90 the previous week.The European Commission have expressed delight at the vote yesterday, Connie Hedegaard, EU Commissioner for Climate Action, said, "With today's vote,
the European Parliament has sent a clear message: Europe needs an effective ETS and a genuinely European climate policy. I of course welcome this positive vote which also shows that the European Parliament shares the Commission's view: we must have a well-functioning European carbon market to boost innovative low-carbon technologies in Europe. The next step is now for the Council to take a decision. The sooner, the better, so that we can move on to the structural reform of the ETS as soon as possible."

Auctions
EEX held auctions last Thursday, Friday, Monday and Tuesday,auction prices were 4.31, 4.31, 4.06 and 4.33 respectively. This morning, the EEX auction cleared 3,461,500 EUAs at 4.55. The cover ratios for the above auctions were 2.30,3.57,2.62,3.86 & 3.30 respectively.(Cover ratio Amount of bids/actual auction volume). Yesterday ICE auctioned 4,134,000 euas at 3.85each. In total an extra 22,000,000 EUAs were brought to the market place.

27/06/2013 28/06/2013 01/07/2013 02/07/2013 03/07/2013 Volumes lots Week %

Offsets
In june, 15 new CDM projects were submitted. The current level is currently half of that witnessed for the same month last yearThe CDM Pipeline now contains 8866 CDM projects. June had a smaller monthly issuance of CERs of 17.8 MCERs. The total issuance is now 1353 MCERs. The first CDM project of 2013 had its first issuance, showing a 7 month CDM pipeline timeframe, much improved on the recent past. This project was for grey CERs which may indicate that the Chinese are willing to take these. Do remember that these credits must be transferred from the EUETS as soon as possible. If you are holding these credits, DBLM Solutions can assist in a route to market.

The price only rose about 10% in the aftermath after the vote but we should see steady gains as the realistion that 900 million allowances are to be removed from the market place. Although, between 20 and 30 million EUAs are added on a weekly basis through auctions.The auction demand remained at the higher end of recent demand this morning. A bullish move in the energy compex should also support prices.

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.