Forestry and the Emissions Trading Scheme

Price Update

More of the same with the NZU market over the last month, with little activity in general. Prices dipped a little in mid-November to around $24.80, but recovered to be back at $25.00 by the end of the month. Early into December we have seen this level maintained.

EUA prices continued to fall last month, moving from €21.30 at the start of October to €16.40 by the end – a devaluation of 23%. Prices began to recover in the first days of November, with December 2018 EUA contracts trading at €17.49 on 2nd November (NZT). This equates to just under NZ$30.00.

Recent declines have been a result of profit-taking by speculators, weaker energy prices and mild weather.

In Europe prices have recovered somewhat from the low points in early November, regaining the 23% stripped off in October to finish November just above €20.00. The UK parliament is scheduled to vote on their Brexit deal on December 12, and Bloomberg have reported a surge in options trading for carbon prices to increase to €25.00 following this vote. This indicates that the market still sees Brexit as a key influence on price in the short-term.