EMISSIONS: EUAs/UKAs Fall on EU Gas Losses

EUAs Dec25 are trading lower, moving in tandem with EU gas price movements. Meanwhile, UKAs Dec25 is edging down, struggling to find a clear direction today. The revised-up temperature forecast and the easing of trading interest are limiting the upward momentum for both contracts.

• EUA DEC 25 down 0.54% at 73.04 EUR/t CO2e
• UKA DEC 25 down 0.11% at 46.37 GBP/t CO2e
• TTF Gas APR 25 down 1.2% at 42.855 EUR/MWh
• NBP Gas APR 25 down 2% at 104.03 GBp/therm
• Estoxx 50 down 1.1% at 5448
• Correlation between EUA/TTF for 30-day period remained stable at 0.65.
• Correlation between EUA/UKA for 30-day period remained stable at 0.71.
• The EUA Dec25 premium to the UK equivalent remained narrow at €17.83/t CO2e.
• The latest EU ETS CAP3 auction cleared at €71.54/ton CO2e, up 4.19% compared with the previous EU auction at €68.66/ton CO2e according to EEX.
• TTF is lower on the day after a 6.4% rally yesterday. Warmer weather is easing pressure on storage withdrawals, while the large rise yesterday likely priced in significant negative sentiment around a Ukraine peace agreement.
• The latest EU ETS CAP3 auction cleared at €71.54/ton CO2e, up 4.19% compared with the previous EU auction at €68.66/ton CO2e according to EEX.
• The trend outlook in ICE EUA futures is bearish, however, the contract has traded sharply higher this week. This marks an extension of the recovery that started Mar 7. Price has traded through both the 20- and 50-day EMAs. A clear break of the 50-day average, at €73.37, would undermine a bullish theme and expose €77.73, a Fibonacci retracement. Key support and the bear trigger is at €66.78, the Mar 7 low.
• EUA Mar25 options is due to expire on 26 March, with the current aggregate open interest at 58k for call contracts, up from 55k in the prior day, and 62k for puts, up from 61. Put/call open interest ratio is at 1.08, lower compared to the 1.11 the previous day amid a roughly 5% open interest increase in call contracts. The largest call volumes stood at 11k at the €75/ton CO2e strike, while put volumes sit at 16k at the €75/ton CO2e strike.
• RWE said that the EUAs decline in 2024 was driven by reduced industrial demand and increased supply of allowances, while influenced by economic factor and low-emissions generation, according to its latest annual report.
• The EU carbon price under ETS 2 will be determined by how quickly the largest emitters will shift to clean heating and transport and how quickly they set policy measures according to Agora Energiewende.
• The UK government has updated Aviation Allocation under UK ETS to account for the expansion of the scope to include Northern Ireland to Switzerland flights, the latest table shown.
• Equinor increased its EUA inventory by 16% in 2024, reaching 10 million EUAs, according to its latest annual report. Despite maintaining net zero target, it has scaled back its targets for reducing net carbon intensity, which is one of its key climate benchmarks.