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).
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.
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