Issue CXVII

The contents of the Newsletter is not a recommendation, either implicit or explicit, to buy or sell emission permits.
Contact: David Boles, Compliance Markets -Direct: +3531 4433 584; Mob:00353 831744707
DBLM Solutions is partly funded by the Wicklow Enterprise Board.
Carbon Newsletter
DBLM Solutions
05 June 2014


The EUA Dec13 contract is currently at 5.42.
The carbon price is supported by positive reporting
about the European collectives willingness to
engage in market reform prior to the end of Phase
3. The most likely outcome at this stage is the
creation of a carbon reserve to assist in the overall
price managenent.
Weekly
Recap
ICE
EUA
Spot
ICE
CER
Spot
ICE
EUA
Dec13
ICE CER
Dec13
29/05/2014 5.20 0.10 5.20 0.09
30/05/2014 5.13 0.08 5.11 0.08
02/06/2014 5.14 0.08 5.20 0.10
03/06/2014 5.37 0.08 5.47 0.09
04/06/2014 5.41 0.09 5.40 0.09
Volumes lots 1,608 3,275 73,225 162
Week %

4.03% -0.10% 3.84% -

The EUA/CER widened this week to 5.32, at
close of business last night versus the 5.03 spread
we witnessed last week and 5.01 the week before.
Auctions
EEX held auctions last Friday, Monday & Tuesday
Auction prices were 5.10,4.94 & 5.19,
respectively. The cover ratios for the above
auctions were 3.10, 4.23 & 7.26 respectively.
UN Offsets
The supply demand balance is unhealthy with
roughly 3-5 times the residual demand forecast out
to 2020. This translates to a residual demand of
between 1,120 to1,230 megatonnes of carbon
dioxide equivalent emanating from the EUETS and
effort sharing decision.
The current CDM and JI portfolio is estimated to
generate between 3,500 to 5,400 MtCO2e for 2014-
2020. The current situation is reflected in the
exodus of the once biggest players from the market.
Firstly, major banks and trading houses exited,
followed by verifiers. In February 2014, as a
further sign of the
steady decline of the CDM, DNV GL, once the
biggest Designated Operational Entity (DOE),
announced its withdrawal from the validation and
verification service business, followed by JCI in
March. Estimates of stranded CDM costs reach as
high as US$66 billion. The market conditions are
realised when we compare validation figures
between 2012 and 2013. There was an 88%
decrease in project submissions in 2013 year on
year.
Aviation
The European Commission announced yesterday
that they will resume EUAA auctions in September
after an 18 month break. This should decrease a
certain amount of uncertainty in the market for
aviators.