18 September 2018

Record volatility roils EU carbon markets

Traders are focused on the impact of Market Stability Reserve measures due to be introduced from 2019 to 2023

European carbon allowances had their most volatile five-day session ever last week, as a record high triggered profit-taking that led to panic selling. The market was hit by a series of events which persuaded speculators to ditch sizeable holdings after enjoying a trebling of prices this year. After reaching a ten-year high at €25.79 on Monday, EU Allowances (EUAs) plunged to as low as €17.90 on Friday. Monday's record high capped a six-day rally that saw EUA prices spike by nearly 28%, as traders continued to bet that measures to eliminate a chronic oversupply of permits would boost prices yet further. Analysts have recently forecast that EUAs could reach €30 by the end of the year. Th

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