DBLM Solutions

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

DBLM Solutions Carbon Update

Carbon Overview

David Boles 01 4433584 (Direct) dblmdavid (SKYPE) david@dblmsolutions.com

At time of writing the Dec '13 EUA Contract was at 4.41. Analysts have commented that the selloff last week has exhausted and a gap in auctions has supported carbon prices. Obama's speech was much as expected yesterday. Republicans answered in the usual vein of job loss and economic woe. He also indicated that he would block the keystone XL pipeline if it was proven that its' construction would exacerbate the GHG emission rate. There is a still long way to go regarding new regulations for power plants. The EPA is often in court, either to halt new regulations or environmentalists trying to push through stronger methods. The new rules, which Obama wants finalised by 2015, could be tied up in court for years. All in all, nothing entirely new was laid out by Obama, he re iterated his commitment to reduce U.S GHG emissions by 17% below 2005 levels by 2020. At face value, the recent moves by Obama are nothing more than a realisation by the US that they must be on the same page as the rest of the world in order to compile a global pact by 2015. The European Parliament and the EU governments reach a deal on the European Commission's car emissions proposal: the 95g CO2/km 2020 target is secured and there is a limited use of supercredits. Also, the European Commission is asked to propose a 2025 target by end-2015. This represents a 40% reduction from the mandatory 2015 target of 130g/km. Supercredits for low emission vehicles will be issued to vehicles which produce 50g CO 2/km. Each low emitting vehicle will be counted as 2 vehicles in 2020, 1.67 in 2021 and 1.33 in 2022.
Dec 13 EUA

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