Weekly Carbon Outlook – July 17, 2017

July 17, 2017 by Ronjoy Bezbarua

(See below to download report)

Trading Report

  • Positive market sentiment helps in price rise, reaching $15.11 for the front and $15.26 for the benchmark
  • OCA Dec 17 benchmark prices close at CAD 19.59 (USD 15.46)
  • OI sees positive net change of 2,250,000 contracts after two consecutive weeks
  • Volume traded rises to 5,563,000 tons

Price Expectations

  • The current front reached its new peak of USD 15.27 during an eventful week on the policy front
  • AB 398 might result into a significant increase in the cost of compliance by $8.68/ton on average due to the restrictions on offsets as a least-cost compliance measure.
  • Expected V17 ranges: $15.05- $15.17 (Front); $15.23- $15.34 (2017 Benchmark)

Policy Tracker

  • AB 398- Introduced by Assembly Members Eduardo Garcia, Senator De León .It aim to extend Cap-and-Trade program beyond 2020 till 31st Dec 2030. It requires the state board to include specified price ceilings, price containment points, offset credit compliance limits, and industry assistance factors.
  • SB 100- Introduced by Senate President Pro Tem Kevin de León, it requires California to generate all its electricity from renewable.
  • SB 498-Introduced by Senator Skinner. It is an act to add Section 43018.8 to the Health and Safety Code, and to add Section 25724 to the Public Resources Code, relating to vehicular air pollution

Key Dates

  • Aug 15– California Air Resources Board and Quebec’s MDDELCC will conduct its 12th Joint Auction for Carbon allowances and will offer year 2017 vintage allowances in the Current Auction and year 2020 future vintage allowances in the Advance Auction.

Download this report (pdf)

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