Analysts have lowered forecasts for the price of European Union carbon permits in the fourth quarter as the threat of a no-deal Brexit hangs over the market. EU Allowances (EUAs) are expected to average 26.13 euros/tonne in Q4 2019, according to a survey of eight analysts polled by Reuters, a 3.4% drop compared with figures given in July. But further out, forecasts for 2020 and 2021, at 34.50 euros a tonne and 36.79 euros a tonne were 0.4% percent and 6.9% percent higher, respectively, from the July forecasts. The European Emissions Trading System (ETS) charges power plants and factories for every tonne of carbon dioxide they emit. With Britain poised to leave the European Union at the end of the month it is still unclear whether the country will leave with a deal, no deal or further delay its exit. Under a no-deal Brexit, Britain would automatically leave the European carbon scheme, leading to expectations of a sell-off by British firms holding EU carbon permits they no longer need.
Reuters 4th Oct 2019 read more »