Issue LXXII

Carbon Newsletter

DBLM Solutions
14 March 2013 Carbon Dec 13 continues to fall this morning hitting a low of 3.45 this morning, bouncing back slightly to 3.51 at time of writing. Carbon should be given some direction today on the back of a European Parliament vote that was postponed yesterday. The vote today includes targets for 2030 and should provide some indication on their views towards a temporary fix and longer term reforms for the EUETS. Again , indecision is emanating between German Economic and Environmental ministers as how to fix the burgeoning carbon crisis. There will probably be an opportunity to pick up Carbon for next to nothing, but for how long.
Weekly Recap ICE EUA Spot 4.22 4.18 3.88 3.66 3.45 446 -18.24% ICE CER Spot 0.21 0.21 0.19 0.18 0.16 189 -23.81% ICE EUA Dec13 4.32 4.26 3.95 3.73 3.52 111,653 -18.51% ICE CER Dec13 0.35 0.35 0.35 0.33 0.31 3,642 -11.42%

07/03/2013 08/03/2013 11/03/2013 12/03/2013 13/03/2013 Volumes lots Week %

grid access. The focus for these utilities will be now on international gas arbitrage opportunities. LNG prices vary widely in Asia, Europe and North America. Asia typically pays $17 per million British tharmal units(mmBtu), Europe slighthly above $10 and North America only$3.50 per mmBtu. Yesterday, the European Parliament approved 2 new laws to improve EU rules on monitoring and reporting of GHG emissions. The laws now go to the council before being enforced. Notably, the inclusion of forestry and agriculture are included, representing real progress in the overall scheme of things.The two sectors mentioned are the last 2 sectors that to date have no common EU wide rules on GHG. This represents a first step to include all sectors in order to achieve specified targets. The EUA/CER spread narrowed this week to 3.29 at close of business last night versus the 3.98 spread we witnessed the week before and 4.06 the previous week.

Auctions
EEX held auctions last Thursday, Friday, Monday and Tuesday, auction prices were 4.12, 4.15, 4.01 & the EU auction failed on Tuesday, were achieved respectively bringing an additional 11,945,000 EUAs to market. The cover ratios for the above auctions were 3.35, 3.30 & 2.66 respectively. This mornings auction cleared 4.46 million credits at 4.12. On Wednesday afternoon, 2 million Flemish Phase 2 allowances were sold at 3.66. The fortnightly UK auction was held by ICE on Wednesday when 4,134,000 EUAs were sold at 3.60 each. The month of March will see another 48,924,000 EUAs released into the market through auctions at EEX and ICE.

German baseload prices have dropped over 30% in the last 2 years and this can be reflected in the drop of carbon over a similar period. E.ON have announced that they may have to close some of their new utilities if there is not an increase in demand and lay the blame of renewables priority

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. DBLM Solutions is partly funded by the Wicklow Enterprise Board.