EU carbon prices expected to be €11.40 by 2020 -Point Carbon survey

Published 17:39 on May 6, 2016  /  Last updated at 17:40 on May 6, 2016  /  Americas, Asia Pacific, Canada, China, China's National ETS, China's Offset Market, China's Pilot Markets, EMEA, EU ETS, International, Kyoto Mechanisms, New Zealand, South Korea, US  /  No Comments

EU carbon prices will rise to €11.40 by 2020, according to a Thomson Reuters Point Carbon annual survey of European carbon market participants and observers.

EU carbon prices will rise to €11.40 by 2020, according to a Thomson Reuters Point Carbon annual survey of European carbon market participants and observers.

Some 340 European respondents also said they expected benchmark prices to average €6.80 this year, around 90 cents above the year-to-date mean.

The 2020 view is lower than the €13.65 average predicted in a Feb. 9 Carbon Pulse poll of 12 market analysts, with Point Carbon’s survey conducted over Feb. 24 to Mar. 21.

Forecasts may have since increased as prices have recovered somewhat from a February low of €4.62 to around €6, but the benchmark Dec-16s remain well below the end-2015 price of €8.29.

Opinion was very divided on the causes of the Q1 price collapse, with 39% of 307 respondents believing it was due to a delayed impact from falling prices in other energy markets, with 37% instead blaming it on a realisation that the market would remain in surplus through 2030. Just 14% said it was due to speculators short-selling.

Some 65% of the respondents expected the EU ETS to be Europe’s main climate policy instrument through 2030, roughly in line with last year’s view.

Some 61% of 74 EU compliance company respondents said the ETS causes emissions reductions or had done in the past, while 23% said it had not and is not likely to through 2030.

However, the holding of surplus units in the market appears to be falling, with just 29% of compliance company respondents saying they held a surplus, well down on the 39% of respondents in last year’s survey, and 43% in 2014.

WIDER WORLD

Around 45% of 635 respondents said they thought it unlikely the Paris Agreement put the world on track to limit global warming to 2C.

Some 48% believed carbon trading would expand or markets would link by 2030 as a result of Paris.

In the North American carbon market, 64% of 107 respondents expect more states or provinces to follow Ontario and join the WCI by 2020, while just 7% of 103 think the Supreme Court’s stay on the Clean Power Plan will stop states from implementing it.

Two-thirds of 72 respondents expect a delay to China’s national ETS, which the government plans to launch in 2017.

This year’s survey was the eleventh the company has conducted. It received 908 respondents and covers views on the EU ETS, WCI, RGGI, the Chinese markets, South Korea, Kazahkstan, New Zealand, the CDM and JI and the international climate talks.

By Ben Garside – ben@carbon-pulse.com

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