New entrants seek to ride the wave as EU carbon prices quadruple
The EU ETS has witnessed a dramatic change over the past year as carbon prices have quadrupled, the market has attracted new participants, and the developments have given confidence to existing participants that the world’s biggest carbon market will remain the EU’s main climate policy tool.
Carbon Pulse is gathering carbon traders, analysts, regulators, and a host of other experts to London on Oct. 16-18 for the third annual Carbon Forward conference, an event geared to helping emitters and investors navigate the evolving European and global carbon markets.
The conference will devote an entire day (Oct. 17) to the EU ETS, which has seen prices hit a seven-year high of €16.70 this month and is enjoying renewed attention from investors as the 2019 launch of the supply-curbing Market Stability Reserve is widely expected to push prices well above €20 in the next decade.
“The MSR injected a new dynamism into the European carbon market. We see a new set of participants entering the market building sizeable speculative positions,” said analyst Marcus Ferdinand of ICIS, who will be speaking at the event.
“At the same time, traditional players have become more restrictive in selling and are even building strategic reserves,” he added, noting that ICIS forecasts EUA prices will peak at €41 in 2023.
The EU ETS day of the conference will feature an ‘investor stream’, evaluating how the market will develop as power generators rapidly decarbonise, and a deep-dive into the investor motives, including expert technical analysis, trader insight, and fund strategies.
The event will also feature an industrial stream to examine how Europe’s big manufacturers can manage their rapidly-increasing carbon risk, while looking at how their free allowance allocation levels are set to change.
The conference’s first day closes with a shakedown of the EUA price projections from top carbon market analysts, who for the first time in a decade are assessing a market facing a substantial shortage of allowances.
“While we expect the bull-run to lose some of its steam going forward, we forecast carbon prices to be on a consistent rising path towards 2030. But as we’ve learned over the past few weeks, the EU policy framework is not set in stone,” said Hege Fjellheim, an analyst at Thomson Reuters Point Carbon, who will also speak at the conference.
Point Carbon expects EUA prices to peak at €29 in 2030, revising down its projections in recent weeks as EU lawmakers set more ambitious clean energy goals that are expected to dampen demand for carbon allowances from the power sector.
“Should EU leaders agree on the more ambitious 2030 climate target as recently called for by Commissioner Arias Canete, this would require a steeper cap reduction factor for the EU ETS. So even now with a major reform just completed, I think it’s safe to say that for the EU ETS – review is the only constant,” she added.
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CARBON FORWARD FACTFILE:
- Speakers are confirmed from the European Commission, with at least seven carbon market analysts and leading participants from utilities, industrials, banks, exchanges, and trading houses also set to take part. Click here to see the latest speaker list.
- The two-day conference (Oct. 17-18) is being held once more at London’s 5-star Canary Riverside Plaza Hotel, while the venue for the pre-conference Training Day (Oct. 16) is just down the street at the Citigroup Centre, 25 Canada Square.
- Carbon Forward is fast becoming established as Europe’s premier event for companies affected by the growing carbon markets. There is still time to participate – RESERVE YOUR PLACE NOW
- Carbon Forward 2017 attracted more than 200 delegates & speakers, and this year’s event is slated to be even bigger. Participants, decision-makers, and top-flight speakers are drawn from industry, utilities, brokers/trading houses, government, and trade organisations.
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By Ben Garside– firstname.lastname@example.org