Issue CXXXIV

The contents of the Newsletter is not a recommendation, either implicit or explicit, to buy or sell emission permits.
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Carbon Newsletter
DBLM Solutions
03 Sep 2014


The EUA Dec14 contract is currently at 5.61.
The price hit a low of 5.48 this morning. The
EUA carbon chart looks very much bearish but
auction demand is up with a healthy x10 demand v
supply at yesterdays auction held by the German
Bourse EEX.
Last Friday, the European Union rejected proposals
to sideline measures for Industrials that are
susceptible to carbon leakage. i.e compensation for
Industry that may be tempted to relocate to regions
with no carbon mandate.
Weekly
Recap
ICE
EUA
Spot
ICE CER
Spot
ICE
EUA
Dec14
ICE CER
Dec14
26/09/2014 5.82 0.12 5.94 0.12
29/10/2014 5.79 0.12 5.76 0.12
30/10/2014 5.81 0.12 5.84 0.12
01/10/2014 5.78 0.11 5.82 0.11
02/10/2014 5.72 0.12 5.68 0.12
Volumes lots 6,700 0 72,789 334
Week %

-1.71% - -4.37% -
Members of the panel voted 34 to 30 with three
abstentions to defeat a motion by Bas Eickhout of
the Greens group to block the measure, known as a
carbon-leakage list. The proposed regulation,
which had already been approved by
representatives of EU nations and was then
undergoing scrutiny in the blocs Parliament, gives

175 industries a bigger share of free carbon permits
than other emitters.
The EUA/CER spread narrowed this week to
5.60, at close of business last night versus the
5.68 spread we witnessed last week and 5.71 the
week before.
Auctions
EEX held auctions last Thursday, Friday, Monday,
Tuesday & Thursday. Auction prices were 5.80,
5.85, 5.68, 5.50 & 5.74 respectively. The
cover ratios for the above auctions were 6.53, 8.71,
8.55, 4.76 & 10.05 respectively. (Cover ratio = no.
Of bids/tonne divided by auctioned allowances)
On Monday, The European Commission approved
the distribution of free allowances to power
producers in the Czech Republic for 2014
emissions. An extra 22.4 million allowances will be
distributed for free in the Czech republic.
Most EU power generators do not receive free
allowances under the rules of the current EU ETS
phase (2013-20) but the Czech Republic is one of
seven EU member states that have taken advantage
of a derogation allowing their power generators to
receive free allowances.
The derogation allows some countries to receive
free allowances for a transitional period ending in
2019, in order to modernise their power sectors.
The Czech Republic will be the first to allocate its
2014 allowances. Bulgaria, Cyprus, Estonia,
Lithuania, Poland and Romania have together
applied to allocate a further 129.3mn allowances.