Document summary
The EU emissions market is still waiting for clarity on the issue of the back-end loading of allowances from the pool of Phase-3 EUAs to be auctioned over 2013-20, and significant developments on this question could be forthcoming in Q4. In terms of the volume of allowances to be back- end loaded, the Commission has given three possible orders of magnitude: (i) 400m; (ii) 900m; and (iii) 1,200m. In the authors' view, a number around 400m would be a disappointment to the market and would risk seeing prices trade lower than current levels, while a number close to 900m or 1,200m should in the authors' view be enough to push prices back towards €15/t over the 12-18 months following such a decision.