Weekly Carbon Outlook – June 5, 2017

June 5, 2017 by Billy Hamshaw

(See below to download report)

Trading Report

  • Market remains stable as Trump announces US withdrawal from the Paris Agreement
  • Gov. Brown signals carbon linking intention ahead of China visit
  • AB 378 rejected by Assembly but granted reconsiderations
  • 5,992,000 tons traded with midweek activity breaking silence
  • New front contract, Jun 17, cleared on Friday at USD 14.10, USD 0.05 above the previous week’s close
  • A net change of 4,150,000 observed on open interest creation
  • OCA’s Dec 17 benchmark rises to CAD 19.25 (US$14.26) ahead of second auction this week

Price Expectations

  • The CCA market witnessed a generous gain in light of the successful auction, the current front closed at USD 14.10
  • Spread between V2017 and V2018 benchmark reduces as participants focus on current vintage
  • Expected V17 ranges: $14.10- $14.18 (Front); $14.25- $14.233 (2017 Benchmark)

CCO Tracker

  • Handful of CAR projects receive registry credits
  • Willits Woods IFM (CAR1140) gains a further 217k ROCs
  • Support from business groups and linking partners add to discussion on offset usages

Policy Tracker

  • SB 100 – Introduced by Senate President Pro Tem Kevin de León, it requires California to generate all its electricity from renewable.
  • SB 775 – It would now no longer allow banking of allowances and use of offsets in the cap-and-trade program beyond 2020. It also prevents free allocation of allowances and thus incentivise industry to invest in cleaner technology.

Key Dates

  • June 02 – ARB Public Working Meeting for evaluation of the carbon intensity of renewable fractions, quantifying and reporting the renewable fuel volumes, and monitoring and verification under the Low Carbon Fuel Standard.
  • June 06 – Ontario cap-and-trade auction 2 for greenhouse gas allowances.

Download this report (pdf)

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