CARBON MARKET UPDATE - Microsoft · 2019-11-27 · GLOBAL CARBON MARKET VALUE (€BN) Source: Figures taken from Bloomberg, ECX, Bluenext, EEX, ... credit imports (519Mt) Annual demand

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CARBON MARKET

UPDATE

GUY TURNER

DIRECTOR

[email protected]

TWITTER @GUYTURNER

OCTOBER 2012

mailto:[email protected]

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180+ STAFF IN 13 OFFICES

North America

(39)

South America

(5)

Europe

(88) Asia Pacific

(33)

Africa

(29)

San Francisco

Sao Paulo

Washington New York

Cape Town

Sydney

London Beijing

New Delhi

Hong Kong

Tokyo

Singapore

Zurich

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GLOBAL CARBON MARKET VOLUME (MT) AND VOLUME-

WEIGHTED AVERAGE PRICE (€/T)

Source: Figures taken from Bloomberg, ECX, Bluenext, EEX, CCX, Nordpool, include UNFCCC and our own Bloomberg New Energy

Finance estimations. ”Others” includes RGGI and NSW GGAS.

0.22 0.66

1.24

3.07

7.14 6.81

8.32

11.40

0

4

8

12

16

20

24

0

2

4

6

8

10

12

2005 2006 2007 2008 2009 2010 2011 2012

EUA sCER pCER Others AAUs Forecast

Volume - weighted

average price

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GLOBAL CARBON MARKET VALUE (€BN)

Source: Figures taken from Bloomberg, ECX, Bluenext, EEX, CCX, Nordpool, include UNFCCC and our own Bloomberg New Energy

Finance estimations. ”Others” includes RGGI and NSW GGAS.

3

10

21

63

80 85

92

73

0

20

40

60

80

100

2005 2006 2007 2008 2009 2010 2011 2012

Others EUA sCER pCER AAUs Forecast

+102%

+204%

+27% +6% +9%

- 21%

+201%

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PROJECTED GROWTH OF CARBON MARKET (€BN)

Bloomberg New Energy Finance

Assumes: EU 21% target in 2020 on 2005 levels, continuation of CDM, oneway linking between EU

and Australia, capped markets in South Korea, Japan, Australia, New Zealand, California, Japanese

volume includes bilaterral offsets,

61 77 83

94 73

91 104

179

234

266

325

352

414

0

50

100

150

200

250

300

350

400

450

2008 2010 2012 2014 2016 2018 2020

Japan

New

Zealand

Australia

California

CER

EUA

6 / / / /

HISTORICAL PRICES (€/TCO2E)

Source: Bloomberg New Energy Finance

0

4

8

12

16

20

Apr Jun Aug Oct Dec Feb Apr Jun Aug

Dec-12 EUA

Dec-12 CER

Spread

2011 2012

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EU ETS EMISSIONS

* Absolute emissions include all reporting installations irrespective of change in coverage between years

**Relative emissions only include installations which have reported in each year from 2005-10

MtCO2e

20

30

40

50

60

70

80

90

100

110

2005 2006 2007 2008 2009 2010

1% 0.5% -5.3% -11.4% 3.5% Emissions index

Dec 2012 EUA price

2012

-2.25%

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EU ETS EMISSIONS AND CAP - EXCLUDING CER IMPORTS

(MTCO2)


0

500

1,000

1,500

2,000

2,500

3,000

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Emissions forecast

21% EU ETS cap

All projections as of 26 July 2012.

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EU ETS EMISSIONS AND CAP – INCLUDING CER IMPORTS

(MTCO2)


0

500

1,000

1,500

2,000

2,500

3,000

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

Emissions forecast

21% cap (incl. imports)


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ANNUAL EU ETS DEMAND (MTCO2/YR)

Source Bloomberg New Energy Finance

no CERs

with CERs

-600

-400

-200

0

200

400

600

800

1,000

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028


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CUMULATIVE DEMAND (MTCO2/YR)

New demand

-2,500

-2,000

-1,500

-1,000

-500

0

500

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

EU ETS now projected to

become short

in 2029

Source Bloomberg New Energy Finance All projections as of 26 July 2012.

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FUNDAMENTALS MODIFIED FOR HEDGING ACTIVITY AND

BACKLOADING (MTCO2/YR)

Demand relative to 21% cap

Demand with hedging

-2,500

-2,000

-1,500

-1,000

-500

0

500

1,000

1,500

2,000

2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 2028

EU ETS now projected to

become short

in 2024

Demand with hedging and backloading

Source Bloomberg New Energy Finance All projections as of 26 July 2012.

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COST OF ABATEMENT IN 2024

-

60

120

180

240

300

0 100 200 300 400 500 600 700 800 900

Pri

ce (U

SD)

Abatement (MtCO2)

Classic MACC

CCGT3Power CCS

Wind

CCGT2

OFS

Power CCS

CCGT4

CCGT3Power CCS Power CCS

Power CCS

200

160

120

80

40

0

Abatement delivered by base case

(130Mt)

Annual demand

excluding credit imports

(519Mt)

Annual demand

including credit imports

(369Mt)

€70 -

€100/t

CO2


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CER PRICES AND TRENDS


0

10

20

30

40

0

0.5

1

1.5

2

2.5

3

3.5

4

03 Sep 10 Sep 17 Sep 24 Sep

Aggregate volume

Dec-12

Dec-13

Dec-14

UN issues the 1 billionth CER

EUA-CER swapping activity provides support for CER prices

Ukraine announces it has issued 20.5Mt of ERUs since end-July

Dec-12 CER closes at a record

low €1.53/t

Dec-12 EUA-CER spread widens to

record €5.98/t

Dec-12 CER price falls below €2/t for the first time

€/tCO2

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GLOBAL CER SUPPLY - ACTUAL AND FORECAST


(MtCO2/yr)

0

100

200

300

400

500

600

700

2005 2007 2009 2011 2013 2015 2017 2019

Future projects

Oceania

Middle East

Africa

Europe

Asia others

Americas

Russia

India

China0

100

200

300

400

500

600

700

2005 2007 2009 2011 2013 2015 2017 2019

Future projects

Other tech

Energy efficiency

Methane

Renewable energy

HFC/aN2O

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0

100

200

300

400

500

600

700

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Eligible & available to the EU ETS

Non EU ETS eligibleEstimated demand from non

EU ETS demand centres


(MtCO2/yr)

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1,008

1,845

3,585

1,025

263

542

0 1,000 2,000 3,000 4,000 5,000

Demand

Supply

Issued CERs EU ETS

Exisiting projects incl. JI EU governments

Future projects JPN, SK, Aus, NZ

4,856Mt

MtCO2e

3,413Mt


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SHAPE OF THE WORLD CER MARKET

0

10

20

30

40

50

0 1,000 2,000 3,000 4,000 5,000

MtCO2e

€/t

Demand

Supply

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construed to be a representation of such a guarantee. Any opinions expressed reflect the current judgment of

the author of the relevant article or features, and does not necessarily reflect the opinion of Bloomberg New

Energy Finance. The opinions presented are subject to change without notice. Bloomberg New Energy

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CARBON MARKET UPDATE - Microsoft · 2019-11-27 · GLOBAL CARBON MARKET VALUE (€BN) Source: Figures taken from Bloomberg, ECX, Bluenext, EEX, ... credit imports (519Mt) Annual demand