From S&P Global Platts, March 7:
S&P Global Commodity Insights editors continue to watch the impact of the Russia-Ukraine conflict on markets. Germany is doubling down on its renewable energy policy, while sustainable aviation fuel producers await demand signals from customers.
1. EU carbon prices plunge as Russia-Ukraine conflict triggers sell-off by financials
What's happening? Carbon allowance prices under the EU Emissions Trading System have lost a third of their value within the space of five days, as the Russia-Ukraine conflict spooked the market. In particular, the financial side of the market, which doesn't have compliance obligations, appears to have liquidated positions, sending the price crashing as low as Eur60/mt from more than Eur95/mt in early February.
What's next? The uncertainty over the duration and ultimate impact of the Russia-Ukraine conflict has cast a shadow over carbon prices, with the market factoring in an increased risk of disruption to emissions-intensive industries across Europe and potentially slower economic growth. Expect more price volatility as the uncertainty continues. Participants will be watching closely to see where demand kicks back in at these lower prices, while companies have until April 30 to surrender allowances to match their calendar 2021 verified CO2 emissions....
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