EUAs sky-rocketed on German carbon floor plan

Besides in France where the colder temperatures and weakening nuclear availability lifted the prices further up, the European power spot prices retreated yesterday, pressured by forecasts of stronger wind output. The day-ahead prices averaged 229.51€/MWh in Germany, Belgium and the Netherlands, -40.13€/MWh day-on-day, and 302.14€/MWh in France, +6.32€/MWh dod.

Trading mostly neutral for the first part of the day, the EUAs surged by 3.60€/t (+5%) up to a new record of 73.18€/t mid-afternoon after the German newly-formed coalition announced its intention to push for the implementation of a carbon floor of 60€/t in the EU ETS and, in case of failure, to convince the other member states to introduce national measure to limit any downside in carbon prices. The EUA Dec.21 closed at 72.91€/t, +3.74€/t dod, but is already correcting this morning as the market digests the news and estimates its feasibility, with several participants pointing to the strong opposition the measure is likely to face.

The power forward prices unsurprisingly tracked the sharp bullish run of emissions prices and posted rather hefty gains along the curve, but could retreat as well this morning.