W3: Price chart

W3: EU-ETS

Carbon continues to take direction from energy complex

The EUA Dec-23 futures contract continued to follow the TTF front-month contract for most of week 3. Prices slid from Thursday’s (12 Jan) settlement price of EUR 80.24/t to close at EUR 77.57/t on Monday (16 Jan). Tuesday (17 Jan) saw EUAs approach the 5 January low of EUR 77.00/t before bouncing off this key resistance level and rebounding in line with a turnaround in gas prices. Wednesday’s session (18 Jan) saw a major leap in prices, crossing both the 200-day and 50-day moving averages to settle just below the day’s high at EUR 82.26/t. The bullish momentum continued with less vigor into Thursday (19 Jan), closing the week at EUR 83.90/t – a 4.56% increase week-on-week.

While fundamentals provided direction for carbon through week 3, technicals and participant behavior provided magnitude to these trends. Wednesday’s 4.44% jump in the EUA benchmark contract was likely a combined reaction to prices breaking resistance at EUR 80/t and some short covering, amplifying the signal provided by the broader rebound in the energy complex.

For the week ahead we expect carbon to take direction from the energy complex, in turn taking direction from changes to weather forecasts. Updated forecasts that show lower than normal temperatures through the remainder of the month and into the first week of February could lend support to gas, coal, power, and carbon, as will lower-than-normal wind generation. The colder weather will spur thermal burn which may encourage additional compliance buying from power generators.

The unexpected interest in the March-23 contract that has materialized in the past week in addition to healthy EUA auction demand may be indicative of compliance entity purchasing ahead of this spring’s compliance deadline. With excessive energy prices through much of autumn 2022, EUAs took a backseat to the more immediate needs caused by the energy crisis.

The macroeconomic picture, while still not overly bullish, is more optimistic than through most of autumn 2022. The mild winter, high storage levels, and subsequent lower prices across energy markets may serve to encourage the industrial activity and lower the risk of recession. 

From a technical perspective, the outlook is neutral to bullish for the week ahead. While we expect carbon to largely continue to follow changes to the fundamental picture as it has in the past week, the technical picture is also supportive. Wednesday’s (18 Jan) session saw EUAs firmly breach the 200-day moving average. Thursday, 19 Jan continued the upwards push with the 200-day average (EUR 83.25) serving as support. The next resistance the market will eye is 28 October’s high of EUR 85.40, after which there is significant upside potential. Expect the Dec-23 contract to trade sideways in the week ahead between EUR 85.40/t and EUR 80/t with the 50- and 200- day averages acting as possible support. Downsidewill becontinue to be limited by the strong resistance we have seen tested several times at EUR 77/t.

Looking ahead to policy, the trilogue agreement on REPowerEU was endorsed by the European Parliament’s committees on budgets and on economic and monetary affairs on 12 January. The deal includes a provision to auction extra EUAs in the coming years, to raise EUR 20 billion to support the energy transition. The next step now is for the REPowerEU Regulation to be approved in plenary. The next plenary sessions are scheduled for 1-2 February and 13-16 February (REPowerEU is not on the draft agendas). The REPowerEU Regulation will also need to be approved by the Council. Once the file is formally adopted and published in the Official Journal, possibly in early March, the European Commission will be able to instruct the auction platform (EEX) to update the 2023 auction calendar to adjust for the extra volumes.

For more information related to the EU ETS please contact 

w3: RGGI

RGGI V23 Future Dec-23 contract prices inch back up over the course of the week

The RGGI V23 Future Dec-23 contract has begun recovering from its initial dip in price seen at the beginning of the new year. The contract closed at USD 13.50/st on Thursday (19 Jan), down just 0.74% from the previous Thursday’s settlement price of USD 13.60/st. The contract reached a 2.5-week high of USD 13.84/st on Tuesday (17 Jan), up 6.05% since its low on 06 January at USD 13.05/st. The increase seen over the past week is reflective of a stabilization in the contract price after warm weather, market uncertainty, and decreased market activity at the start of the new year drove prices down. The slight decrease in the contract’s price seen at the end of this week, however, is reflective of macroeconomic weaknesses (including high interest rates and fears of recession) dissuading increased market interest.

The upward trend in the RGGI V23 Future Dec-23 contract towards levels seen before the start of the new year is occurring despite warmer weather persisting in the Northeast. Temperatures in several RGGI member states have reached levels far above average temperatures for this time of year and have played a role in the drop in the contract price seen in the previous week. Despite the continuation of warm weather in the region, prices have gone up for the majority of this past week. The break in correlation between the market price and weather emphasizes the overdoing of the low-price trend in the previous weeks and the stabilization of market activity bringing the contract price back up to levels more reflective of where it should be.

The continued resurgence in the RGGI V23 Future Dec-23 contract price this week also comes in light of New York’s adoption of its Scoping Plan in which an economy-wide cap-and-invest program is highlighted as a central means of helping the state reach its decarbonization goals. The announcement by Governor Kathy Hochul (D) early last week did not have any immediate impact on the contract price, but growing uncertainty amounting from how the program will affect the state’s participation in RGGI may be attributed to increased long positions taken by compliance entities over the past week. State regulators have highlighted that the power market will remain in RGGI or included in the state’s planned carbon market, but not both. The updated decarbonization targets and expected tightened emission cap that will amount from the Scoping Plan’s implementation, and the increased prices of carbon allowances that will come as a result, may have attributed to increased demand for the RGGI V23 Future Dec-23 contract.

The Auction Notice released by RGGI last week stated that Pennsylvania will not be participating in Auction 59 set to take place on 08 March. Pennsylvania’s exclusion from the auction comes as a result of the continued legal battles regarding the validity of the state’s entrance into the carbon market. Although results pertaining to the outcome of the legal proceedings are likely to come in 2023, the legal discrepancies have prevented the state from participating in any of the RGGI auctions. Consequently, its exclusion from Auction 59 will not have a direct impact on the auction results. The uncertainty of its future membership in RGGI, however, has dissuaded market participation and speculative interest. The Q1 auction will have 21,522,877 carbon allowances available with a Reserve Price of USD 2.50/st.

As market activity continues to pick up after the new year, the RGGI V23 Future Dec-23 contract is expected to remain relatively stable throughout the following week and unlikely to fall back down to the low USD 13.00/st range seen at the beginning of last week. Continued warm weather in the Northeast coupled with continued weak macroeconomic factors, however, are likely to mitigate any significant short-term increases in the contract price.

For more information related to RGGI please contact 

W3: WCI

CCA V23 Future Dec-23 contract continues to rise amid poor weather conditions and policy uncertainty

The CCA V23 Future Dec-23 contract has risen 0.53% from last Thursday’s (12 Jan) settlement price of USD 30.21/t. The contract closed at USD 30.37/t on Thursday (19 Jan), marking a continuation of the upward price trend that began on 06 January. The contract reached a three-week high on Tuesday (17 Jan) reaching a settlement price of USD 30.62/t. The upward trend in the contract price seen this week is due, in part, to the continued severe weather that has been impacting California. Severe floods and extremely high precipitation levels have increased the state’s demand for fossil fuels, and, therefore, increased demand for carbon allowances.

The increase in the price of the CCA V23 Future Dec-23 contract is also attributed to increased market activity as market entities have returned to full operations after the holiday season. The recovery from the dip in prices seen at the start of the new year comes as a result of increased long positions by compliance entities and heightened speculative interest by market entities. Mitigations in significant increases in price, and the slight decrease in the contract price seen at the end of this week, however, are a result of poor macroeconomic sentiment (such as fears of recession) discouraging market activity.

California’s Independent Emissions Market Advisory Committee’s (IEMAC) recent draft of its 2022 report, in congruence with the newly adopted 2022 Scoping Plan, may also continue to attribute to the upward price trend seen this week. IEMAC’s recommendations to the state’s carbon market (including measures like no-trade zones and a tightened emission cap) have instigated increased long positions and demand for allowances by compliance entities in anticipation of long-term price increases for allowances.

As the severe weather impacting the West Coast is expected to ease, so too will the heightened demand for carbon allowances. Subsequently, significant increases in price in the following week are unlikely. Although weather conditions are expected to stabilize, anticipated reform to the California’s carbon market and tightening of its emission cap as a result of the 2022 Scoping Plan and the draft from IEMAC’s 2022 report will keep prices for the CCA V23 Future Dec-23 prices up in the following week.

For more information related to WCI please contact 

W3: K-ETS

The market freeze as the spot price oscillates heavily

This week’s Spot KAU22 contract closed at KRW 14,500/t, shedding8.5% week-on-week. While KAU22 has been oscillating in a range of KRW 13,150 –16,800since the end of December, this week again shows a downturn after last week’s rally in price.KRW 12,088/t, the lower bound for the price volatility measure, is supportive of carbon prices which let the market settle above KRW 12,000/t.

172,531KAUs changed hands this week, a decline of 60% from the previous week’s 408,797 KAUs. The total volume of bids submitted this week was 228,581 KAUs, whereas the total volume of ask recorded 314,090 KAUs, continuing the sell-off trend. 

Normally, transactions are concentrated between April and June ahead of the compliance deadline at the end of June. From this year however, as the new compliance deadline is pushed to 10 Aug, trading activities are likely to pick up in earnest after the government certifies the emissions at the end of May. We expect market activity to remain low with spot prices fluctuating above KRW 12,000/t trigger price level.

Analysis written in a collaboration with our partner company - Carbon-i (

For more information related to the Korea ETS please contact 

W3: China ETS

Further analysis of China ETS will be published in Greenfact’s monthly report.

For more information related to the Chinese ETS please contact 

S3: VCM

Prices continue to fall, and quality of forestry credit is criticized by global news organization 

The price of Dec-23 contracts continues to decrease. This past week, theCGO contract had a decrease of 5.56%, settling at USD 0.85/t on Thursday (19 Jan). The NGO contract experienced a more significant decrease of 18.49%, settling at USD 3.88/t. The GEO contract experienced the slightest fall of the three contracts with a decrease of 3.38%, reaching a price of USD 2.86/t. 

Closed contract volumes remain high: 378 CGO contracts,2,011 NGO contracts, and 3,540 GEO contracts were closed. For the GEO, on Thursday (19 Jan),3,101 contracts were closed, the highest volume in the historical series.

Standardized carbon credit prices have been slipping lower since the beginning of the year, particularly in nature-based contracts where the bearish trend is even more evident after the article calling "carbon credits worthless" was published by 

 this week. The Guardian, together with Die Zeit and SourceMaterial held an investigation to analyze the true benefits these projects have on the climate. According to the study, at least 90% of Verra's rainforest carbon credits do not represent real emission reduction. 

, responded to the criticism and questioned the methodology used by The Guardian.

Our team also posted an analysis recently entitled "

Drop in REDD projects confidence lowers the demand for nature-based solutions

", which explains how events like this can affect demand and, consequently, credit prices.

growth forecast launched by the World Bank

a survey was held by the World Economic Forum

 indicating that the majority of chief economists expect a global recession in 2023. The war in Ukraine, the energy crisis in Europe, and high inflation rates continue to drive away investments, especially voluntary investments, such as the VCM. 

Recent events, such as the Guardian article, emphasize the responsive character of the carbon market, as well as the behavior of market players to be in wait-and-watch mode. Therefore, little activity and a continuous drop in prices are expected in the following week.

For more information related to the voluntary carbon market please contact 

News

Week 12: Pennsylvania governor forms working group to analyze the benefits of maintaining its RGGI membership

GO Week 12 Overview - 2022 GOs reach 7 EUR before 31 March deadline

Week 12: Benchmark contract follows macroeconomic behavior 

Week 12: CME’s CBL voluntary carbon offset futures continue slipping due to the negative press

Week 12: Recovery cut short by banking crisis, part two 

Week 12: KAU22 continues to fluctuate due to policy uncertainty

The EU gas market reform: The updated timeline on the Gas Package

A new beginning for financial players in China's carbon markets?  

ETS expansion to maritime will aggravate EUA scarcity

Commission proposal to extend gas reduction measures

Union database – March update to timelines

March 2023 HUPX Pan-European auction 

EAC Market Report - In The Midst Of A Bullish Wave

A platform with real-time GO data and insights, reporting prices and market fundamentals for Wind, Hydro, Solar, Biomass, Biomethane and RGGOs. 

Our community offers access to webinars, discussions and updates from industry leading experts and analysts. 

EUA Dec-23 continues to follow Dutch TTF front-month

RGGI V23 Future Dec-23 contractbegins to restabilize after initial dip in prices during the start of the new year 

CCA V23 Future Dec-23 contract reaches three-week high as upward price trend continues

K-ETS: Transaction volume continued to be sluggish due to KAU22 price drop and volatility expansion

VCM: The VCM continues to slip amidst heightened criticism towards REDD+ projects

Our Platform gives you unfettered access to price benchmarking, analytics, new and insights covering the green certificates markets. 

Register for a trial now and someone from our team will be in touch with you to learn more about your involvement in the markets and to answer any questions you may have.