Newsletter
Central to the decarbonisation of many sectors under the EU ETS is the widespread rollout of green hydrogen as an industrial feedstock. Up until very recently estimates have suggested that Europe requires very high carbon prices to incentivise the switch away from hydrogen manufactured using fossil fuels, known as grey
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UK carbon prices have not suffered the same sharp declines as the EU
Newsletter
The voluntary carbon market has borrowed a concept from the gold mining sector known as ‘streaming’. Companies that are active in the nascent carbon streaming industry suggest that they offer investors a way to get exposure to the underlying value of carbon credits, while also reducing the carbon credit generation
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The primary market for issuing EU emission allowances (EUAs) is via auction. The results of an individual auction is often interpreted by carbon market participants as being bullish or bearish for the carbon futures market - often erroneously. So, what do the auctions involve, and how should we interpret them?
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Compliance carbon markets typically go through a number of distinct phases in their development. Each phase sets the stage for the evolution of subsequent phases. There is a sweet spot in the development of an individual carbon market where the strength of policy support is such that the market has
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Which industries are most exposed to high natural gas prices?
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One of the pillars of the European carbon bull market during 2021/22 was that emission allowances (EUAs) would become more and more scarce. The thesis was pretty simple. The Market Stability Reserve (MSR) acts to cut the TNAC by 24% per annum, reducing the free float available for obligated
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Reflections on the carbon market liquidation
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Carbon markets will gradually evolve to a state in which liabilities, and not fundamentals drive prices. To see how this could evolve you only need to look at the growth in investment products seeking to manage a specific liability for investors - whether that is retirement, risk management, ESG criteria,
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Every ships captain will know that a sudden change in wind direction can be enough to cause their vessel to crash into the rocks. The options market can also result in rapid, changeable and powerful gusts of a different kind, creating havoc in financial markets.
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“You may not be interested in war, but war is interested in you.” ―Leon Trotsky The horrors of war are a tragedy for the innocent, caught up in the crossfire. Nevertheless, as investors it is important to consider what the potential fallout from the crisis is for the EU carbon
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As fears grow that economic activity could slow sharply in the face of inflationary pressures, its natural to ask what impact a recession will have on the world’s largest carbon market. There have been three notable economic events during the history of the EU ETS: The Great Financial Crisis