New all-time highs for EUA prices

EUA prices hit a new record high on Wednesday at €94.63/ton intraday for the Dec-22 contract with no fundamental driver at first glance. It should be noted that this spike occurred during the presentation of the report on the CBAM (Carbon Border Adjustment Mechanism) proposal to the EU parliament by the lead lawmaker in the environment committee, Mohammed Chahim. As a reminder, the CBAM is intended to replace free allocation of allowances to the industrial sectors under the EU ETS by a charge on the carbon content of imports of iron and steel, chemicals, cement and electricity. Power prices tracked bullish moves in gas and EUA prices on the curve, while a fall in German wind power generation on Thursday pushed spot prices higher.

The return of strong wind power generation in Germany tomorrow (+13 GW d-o-d) could weigh on spot prices today albeit French nuclear fails again to breach the 50 GW mark at the time of writing. Curve contracts could find some support from steady gas and EUA prices (with the Dec-22 contract already reaching a new record high just below the €95/ton mark this morning).