The outlook for the UK ETS this week is bullish. Resurgent demand and a shortage of accessible supply of UKAs outside the auctions seem to be putting us back into bullish territory, with few sellers willing to risk selling in case they are unable to buy back again. Low traded volumes, apart from last Wednesday when the UKA auction was held, suggest the market is being pushed around by relatively few participants, but in the absence of a major correction like we saw at the start of the month, most sellers might judge it too risky to let go of their UKAs. No UKA auction this week and consistently well subscribed auctions every fortnight are not providing much relief. Low wind levels mean natural gas fired electricity is the single largest source of power as of Monday, and with it comes UKA buying demand.

UK ETS Outlook: bearish-neutral

Indicative UKA price: £78.75

YTD average UKA price: £78.87

MTD average UKA price: £71.42

1. UKA Dec22 Price Chart 2. Snapshot of UK energy generation 7/3


For more details on market outlook & protecting against your carbon risk, please email or call +31 20 522 0292