|By PR Newswire||
|August 21, 2014 09:09 AM EDT||
KARLSRUHE, Germany, August 21, 2014 /PRNewswire/ --
Tough times ahead for industrials with ETS compliance obligations, as reduced auction volumes and back-loading mean carbon prices set for sustained increase, reaching double digits by 2015
With prices hitting a 5 month high of €6.50 today, established energy intelligence provider ICIS Tschach predicts a sustained increase in the price of European Trading Scheme (ETS) allowances. On current trajectories, prices are expected to hit double digits and a two-year high by year's end. Such an increase would be a worrying trend for those with significant compliance obligations, especially large, carbon-intensive industrials.
Since the beginning of the EU ETS's Phase 3 compliance period at the start of 2013, the market has been oversupplied with allowances, leading to a sustained period of trading within a €3-6 corridor. Now however, a number of factors are converging to push prices consistently higher.
"After all the volatility and exceptional trading activity in Q1 2014, we are seeing the effects of back-loading really start to take hold now" said Philipp Ruf, Lead Analyst, EU Carbon Markets at ICIS. "Next to the reduced auction volume, the appetite of industrials to sell banked length is rather muted while the demand from utilities seems constant. All these factors, together with the potential momentum derived from the policy discussion around the 2030 emission reduction target and the Market Stability Reserve, suggest a sustained bullish corridor for carbon prices."
Higher carbon prices represent a business risk to all sectors where there is an emissions compliance requirement. However, the biggest effect is likely to be felt in the carbon-heavy industrial sector.
"Up to now, industrials have enjoyed a huge number of free allowances under the scheme and could easily cover their obligations and maybe even sell some allowances at a profit," notes Jan Frommeyer, Director of Market Analysis at ICIS. "Now the free allowances are scarcer, and most carbon-heavy industrials will face a shortage of allowances in the near future. That's not so risky with prices as low as they have been, but as they edge higher it becomes more and more of a problem."
ICIS predicts that carbon prices will enter double digits by the start of 2015 for the first time since 2012. However, with further planned political interventions designed to keep prices high, prices of above €20 are perfectly feasible in the third trading period. Such a scenario would represent a significant risk to large industrials and an intelligent and informed hedging strategy will be vital to protect profits.
"It's not all about the risks though," adds Frommeyer. "For those that proactively manage their exposure now there's a real opportunity to gain a competitive advantage over rivals with less effective hedging strategies."
Notes to editors:
About EU ETS
Launched in 2005, the EU's Emissions Trading Scheme is the cornerstone of the EU's policy to combat climate change.
Large carbon emitters are required to surrender an allowance for each tonne of CO2 emitted. A certain number of free allowances is awarded to each participant and more are released at auction. Allowances may then be traded as required.
The EU ETS was from the start designed as a multi-national - with all EU member states participating in the system - as well as a multi-sector system. In 2013 more than 11,000 stationary installations in 31 countries participated in the scheme. Covered by the EU ETS are carbon dioxide (CO2) emissions from power and heat generation, energy-intensive industry production and commercial airlines as well as nitrous oxide (N2O) and per-fluorocarbons (PFCs).
The system covers around 2bn tonnes of carbon emissions (around 45% of the EU's greenhouse gas emissions in 2013) and the average price for a European Union Allowance (EUA) was €4.50 in 2013.
ICIS Tschach Solutions provides information and intelligence to every participant in the carbon markets. ICIS Tschach Solutions employs a unique combination of quantitative and qualitative research and expert opinion to deliver detailed insight into emissions and carbon trading schemes, and identifies important commonalities and disparities. Our Timing Impact Model provides clients with a more rounded perspective than conventional approaches and helps create competitive advantage. We offer clients a complete and transparent analysis of market dynamics, including emerging upside or downside risks to carbon prices and the assumptions on which these are based.
ICIS has more than 30 years' experience providing pricing information, news, analysis and consultancy to buyers, sellers and analysts of energy and related commodities. In 2013 it acquired Tschach Solutions to add specialist carbon trading services to its portfolio. ICIS Tschach Solutions is based in Karlsruhe.
About Reed Business Information
At Reed Business Information we provide information and online data services to business professionals worldwide. Customers have access to our high-value industry data, analytics, information and tools. Our strong global brands hold market-leading positions across a wide range of industry sectors including banking, petrochemicals and aviation where we help customers make key strategic decisions every day. RBI is part of Reed Elsevier, a leading global provider of data, information and solutions for professional customers.
About Reed Elsevier
Reed Elsevier is a world leading provider of information solutions for professionals. We help scientists make new discoveries, lawyers win cases, doctors save lives, corporations build commercial relationships, insurance companies assess risk, and government and financial institutions detect fraud.
Senior Marketing Manager
Email: [email protected]
SYS-CON Events announced today that GENBAND, a leading developer of real time communications software solutions, has been named “Silver Sponsor” of SYS-CON's WebRTC Summit, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. The GENBAND team will be on hand to demonstrate their newest product, Kandy. Kandy is a communications Platform-as-a-Service (PaaS) that enables companies to seamlessly integrate more human communications into their Web and mobile applicatio...
Feb. 28, 2015 05:00 PM EST Reads: 1,291
VictorOps is making on-call suck less with the only collaborative alert management platform on the market. With easy on-call scheduling management, a real-time incident timeline that gives you contextual relevance around your alerts and powerful reporting features that make post-mortems more effective, VictorOps helps your IT/DevOps team solve problems faster.
Feb. 28, 2015 05:00 PM EST Reads: 1,130
Skeuomorphism usually means retaining existing design cues in something new that doesn’t actually need them. However, the concept of skeuomorphism can be thought of as relating more broadly to applying existing patterns to new technologies that, in fact, cry out for new approaches. In his session at DevOps Summit, Gordon Haff, Senior Cloud Strategy Marketing and Evangelism Manager at Red Hat, will discuss why containers should be paired with new architectural practices such as microservices ra...
Feb. 28, 2015 04:00 PM EST Reads: 1,344
Roberto Medrano, Executive Vice President at SOA Software, had reached 30,000 page views on his home page - http://RobertoMedrano.SYS-CON.com/ - on the SYS-CON family of online magazines, which includes Cloud Computing Journal, Internet of Things Journal, Big Data Journal, and SOA World Magazine. He is a recognized executive in the information technology fields of SOA, internet security, governance, and compliance. He has extensive experience with both start-ups and large companies, having been ...
Feb. 28, 2015 04:00 PM EST Reads: 1,046
Companies today struggle to manage the types and volume of data their customers and employees generate and use every day. With billions of requests daily, operational consistency can be elusive. In his session at Big Data Expo, Dave McCrory, CTO at Basho Technologies, will explore how a distributed systems solution, such as NoSQL, can give organizations the consistency and availability necessary to succeed with on-demand data, offering high availability at massive scale.
Feb. 28, 2015 03:45 PM EST Reads: 2,179
From telemedicine to smart cars, digital homes and industrial monitoring, the explosive growth of IoT has created exciting new business opportunities for real time calls and messaging. In his session at @ThingsExpo, Ivelin Ivanov, CEO and Co-Founder of Telestax, shared some of the new revenue sources that IoT created for Restcomm – the open source telephony platform from Telestax. Ivelin Ivanov is a technology entrepreneur who founded Mobicents, an Open Source VoIP Platform, to help create, de...
Feb. 28, 2015 03:30 PM EST Reads: 3,963
The industrial software market has treated data with the mentality of “collect everything now, worry about how to use it later.” We now find ourselves buried in data, with the pervasive connectivity of the (Industrial) Internet of Things only piling on more numbers. There’s too much data and not enough information. In his session at @ThingsExpo, Bob Gates, Global Marketing Director, GE’s Intelligent Platforms business, to discuss how realizing the power of IoT, software developers are now focu...
Feb. 28, 2015 03:15 PM EST Reads: 1,220
Security can create serious friction for DevOps processes. We've come up with an approach to alleviate the friction and provide security value to DevOps teams. In her session at DevOps Summit, Shannon Lietz, Senior Manager of DevSecOps at Intuit, will discuss how DevSecOps got started and how it has evolved. Shannon Lietz has over two decades of experience pursuing next generation security solutions. She is currently the DevSecOps Leader for Intuit where she is responsible for setting and driv...
Feb. 28, 2015 03:00 PM EST Reads: 2,149
Operational Hadoop and the Lambda Architecture for Streaming Data Apache Hadoop is emerging as a distributed platform for handling large and fast incoming streams of data. Predictive maintenance, supply chain optimization, and Internet-of-Things analysis are examples where Hadoop provides the scalable storage, processing, and analytics platform to gain meaningful insights from granular data that is typically only valuable from a large-scale, aggregate view. One architecture useful for capturing...
Feb. 28, 2015 02:00 PM EST Reads: 1,198
SYS-CON Events announced today that Vitria Technology, Inc. will exhibit at SYS-CON’s @ThingsExpo, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Vitria will showcase the company’s new IoT Analytics Platform through live demonstrations at booth #330. Vitria’s IoT Analytics Platform, fully integrated and powered by an operational intelligence engine, enables customers to rapidly build and operationalize advanced analytics to deliver timely business outcomes ...
Feb. 28, 2015 01:45 PM EST Reads: 1,130
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, it is now feasible to create a rich desktop and tuned mobile experience with a single codebase, without compromising performance or usability.
Feb. 28, 2015 01:15 PM EST Reads: 1,015
Thanks to Docker, it becomes very easy to leverage containers to build, ship, and run any Linux application on any kind of infrastructure. Docker is particularly helpful for microservice architectures because their successful implementation relies on a fast, efficient deployment mechanism – which is precisely one of the features of Docker. Microservice architectures are therefore becoming more popular, and are increasingly seen as an interesting option even for smaller projects, instead of bein...
Feb. 28, 2015 01:15 PM EST Reads: 2,385
Application metrics, logs, and business KPIs are a goldmine. It’s easy to get started with the ELK stack (Elasticsearch, Logstash and Kibana) – you can see lots of people coming up with impressive dashboards, in less than a day, with no previous experience. Going from proof-of-concept to production tends to be a bit more difficult, unfortunately, and it tends to gobble up our attention, time, and money. In his session at DevOps Summit, Otis Gospodnetić, co-author of Lucene in Action and founder...
Feb. 28, 2015 01:00 PM EST Reads: 1,249
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, will explain the best practices of continuous testing at high scale, which is r...
Feb. 28, 2015 01:00 PM EST Reads: 1,085
SYS-CON Events announced today Arista Networks will exhibit at SYS-CON's DevOps Summit 2015 New York, which will take place June 9-11, 2015, at the Javits Center in New York City, NY. Arista Networks was founded to deliver software-driven cloud networking solutions for large data center and computing environments. Arista’s award-winning 10/40/100GbE switches redefine scalability, robustness, and price-performance, with over 3,000 customers and more than three million cloud networking ports depl...
Feb. 28, 2015 01:00 PM EST Reads: 1,477