Newsletter
Critics of the EU carbon market contend that Europe’s policymakers are fools for indulging in such virtue signalling at a time when society, especially the poorest, are hurting under intense inflationary pressures. Regular readers will know that revenue from auctioned EU carbon allowances (EUAs) can be redirected by member
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Commodity markets are typically interpreted through the lens of changes in supply and demand, and the impact on inventories in any particular year. Inventories of ‘consumable’ commodities (e.g. crude oil, wheat, etc.) typically only cover consumption demand for a few months. If there were no inventories at all, supply
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Carbon investors are increasingly looking at other compliance markets outside of the EU. The attraction for many is that as these markets are reformed then the price of emission allowances could stage a similar upward price trajectory as the EU experienced, particularly in the period since 2018 when the price
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Carbon capture, use and storage (CCUS) involves catching concentrated industrial emissions at their source, preventing them from entering the atmosphere. CCUS has been seen as controversial, particularly by environmentalists who see it as a get-out-of-jail-free-card enabling fossil fuel producers and consumers to carry on extracting coal, gas and oil and
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Europe’s pivot towards energy security, sparked by Russia’s invasion of Ukraine, will not come at the cost of decarbonisation. That’s the message from a recently published report by a risk management advisory firm. Gauging the often conflicting effects of higher energy prices, fuel generation switches and investment
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Attention now focuses on upcoming TNAC estimate
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The carbon trade you've probably never heard of
Newsletter
Financial markets have typically worked on the assumption that climate policy would be gradually tightened over a period of several years, if not decades. This is known as the “slow policy ramp”. Too high a carbon price at the outset for example, many reason, will be politically untenable. Instead the
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Japan’s top business newspaper, The Nikkei published an article this week detailing the results of its investigation into ‘carbon neutral’ LNG. The article suggests that many of the claims around carbon neutral LNG are false, with offsets often originating from carbon projects where environmental benefits have been significantly inflated.
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The voluntary carbon market (VCM) cannot be measured simply looking at the current value of various carbon credits. The VCM is a growth sector where everything is up for grabs. It is an unregulated sector where there are no hard and fast rules as to how things must be done.
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“History doesn’t repeat itself but it often rhymes” Financial markets often exhibit similar patterns in the event of a significant shock to market confidence - anticipating the potential effects, the impact and then the recovery. Even if the cause and effects vary between market shocks how prices behave can
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Up until recently, an investor wishing to gain exposure to the EU carbon market had to invest in an exchange traded futures product. That changed in November last year when the first physical carbon allowance investment product launched. Unlike futures based products, investing in the physical allowance is not without