Document summary
After analysing the full-year fuel mix in the power sector in key countries Deutsche Bank now expects a year-on-year decline of 5.2% in 2008 emissions to 2,120Mt from pro-forma 2007 emissions of 2,237Mt. The very weak outlook for EU industrial output in 2009 and the ripple effect of this on 2010-12 forecasts means Deutsche Bank continues to expect a slight surplus of EUAs over Phase 2 as a whole. Market inefficiencies and negative sentiment will weigh on prices over the next 12 months, and there could be short-term price pressure. In total outstanding EUA allocation at c.800Mt is estimated.?