Authors
Mark C. Lewis and Isabelle Curien
Despite continuing weak macroeconomic outlook, the 2013 shortfall could support EUAs. Deutsche Bank has downgraded estimates for 2009-12, but Phase-3 forecasts remain unchanged. There may be some selling of industrial companies’ EUA surpluses and some speculative selling of EUAs ahead of 2010 quota allocations short-term, but no repeat of Q1 2009. Power generators, particularly German generators, will be selling increasing amounts of electricity forward into 2013 and with the first 2013 EUAs not being auctioned until probably Q3 2011; means German generators must hedge 2013 carbon exposure via the purchase of Phase-2 EUAs in turn supporting prices across the curve.