Commodity Spotlight Energy

Emissions trading on hold

After spring saw prices of EU emission allowances slide to a record low, recent months have seen a slight recovery. This tallies with the fact that supply looks set to be tightened in the next few years by temporarily withholding allowances, a process known as backloading. In view of high surpluses, Brussels thus continues to dictate the direction. Price supportive fundamental factors are forced to take more of a back seat. We expect a qualified majority to vote in favour of backloading and thus anticipate that prices of allowances will pick up.

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