isramart : MF Global Weekly VER & CER Market Summary 27 July - 2 August 2009

isramart news:
Volumes on CCX improved over the previous week with 182.8kt traded and the 2007 contract being the most popular. The 2009 contract closed the week $0.05 down on the previous Friday, at $0.45. CAR OTC CRTs forwards are hovering around the $7 mark with spot trading $2-3 higher.

The Dec09 secondary CER contract lost half a Euro to close the week at €12.30, with prices diving from mid-week. The EUA-CER spread narrowed slightly and the market is braced for a few slow weeks trading as many traders take annual leave. Primary CER buyers are accepting smaller sizes with most deals being built around an €8 level.

Recent vintage RE VCUs remain around $4/5 levels with older vintages and EE projects discounted. US VCUs attract a $1 scarcity premium. GS VERs are €8/9 for spot with forwards bid/offered at €6/9.

The British government has passed legislation to remove VAT from carbon emissions, effective from last Friday. This follows allegations of VAT fraud in France and echoes the French and Dutch governments’ positions. Spain and Germany, the two other main European countries where carbon is traded are expected to follow suit. Traded volumes on BlueNext have been lower than average over the past several weeks following a period of strong activity.

The Gold Standard reckons its VERs could be fungible with the mooted US federal cap and trade scheme should the Waxman-Markey bill pass. It is believed by many market participants that new methodologies as well as existing Voluntary Carbon Market standards will need to be accepted in order to help meet the potential demand for non-US credits of up to 1 billion tonnes per year.

Switzerland could join the EU ETS at the start of phase 3 (2013). Negotiations to link the Swiss domestic ETS to the EU’s are scheduled to begin in early 2010.