EU Carbon Fluctuates in Tight Range After Deal Reached on Expanding Market; Create Social Fund (2)

By Mathew Carr

Dec. 18-19, 2022 – Carbon allowances trade in a tight range after EU strikes agreement to expand and boost ambition in its market.

Dec. 2022 futures rose 1% to €84.65/ton, trading between €84 and €86 on ICE (early Monday London time).

https://www.linkedin.com/posts/janahrens1_eu-carbon-market-reform-reduces-an-additional-activity-7010537665599012864-WMbC?utm_source=share&utm_medium=member_ios

Sandbag Brussels reaction, Federico Sibaja, analyst (exclusive):

Even though it’s good news this time free allocation will be phased out (for Carbon Border Adjustment Mechanism sectors only, for now, there are more emissions trading system sectors), the more ambitious Parliament proposal to do it by 2032 was refuted [rejected] and a 100% phaseout by 2034 was agreed.

We still need to receive the final text of the agreement to know whether the Innovation Fund will somehow change its scope and way of giving away money, whether special exemptions on the benchmark review (to the aluminium and steel sector) have remained in the text, and whether that review will consider circularity.

#EUETS agreement sealed this night.

SPOILER: industry wins over people and planet

Our quick take:
➖Lacks climate ambition
➖Free money for industry and no questions asked
➕earmarking of ETS revenue for climate action (with a caveat)

Read more: https://t.co/8mc9IwGRXG
— CAN EUROPE (@CANEurope) December 18, 2022

1/20
Looking for a short overview of what was agreed last night on #EUETS?

Here a little 🧵 with the main outcomes

You can find @CANEurope’s press release here: https://t.co/LeCUASEV7e pic.twitter.com/2nddYZMoVS
— Klaus Röhrig (@klausroehrig) December 18, 2022

Yesterday:

Tomorrow how will the #EUETS price react to the landmark deal #Fitfor55 ?

📈Higher ETS ambition (62%) is bullish
💶But this is more long-term, focus could turn back to the 20bn EUA sales under the REPowerEU

-Dec-22 expiry
-Auction pause from 20th pic.twitter.com/4KqIECuGpm
— Yan Qin (@YanQinyq) December 18, 2022