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CER PRICES ARE DOWN

CER PRICES ARE DOWN. CER and investment potential beyond 2012. Dear All,

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CER PRICES ARE DOWN

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  1. CER PRICES ARE DOWN

  2. CER and investment potential beyond 2012 Dear All, Many customers have asked us over the last 2 months about future value and development of the CERs. I therefore would like to attach you an article from Michael Grubb who describes the potential beyond 2012. Although the market experience a huge down side there is still hope to and potential for the future markets beyond 2012. The Industries in Annex 1 Countries have a setback in the production capacity, which reflex in a lower energy consumption and the result is less demand for CERs and therefore the decreasing prices. The world is facing a recession and prices particularly Steel has fallen. Shipping prices have their lowest point and struggling to places orders to cover their fix cost. The upside of this situation is for cash rich investors. They benefits from extremely cheap civil work and steel structure. Investing now gives the best basis and platform for a fast ROI on potential projects, as the market should settle within the next 2 years. The world population is growing and the demand for more energy is obvious and not to stop particularly in Non Annex countries. In Non Annex the energy consumption is dominated by its population as the peak load is from 6 pm to 10 pm. Annex countries have their peak loads during the day until 5 to 6 pm. This diversity shows us the investment potential of a non Annex country. The CDM faces now another challenge as the CER prices keep falling to a record low of EURO 11.30 per ton CER. For some CDM Consultant companies, which have committed to an average ERPA average Price of EURO 12 / ton CER before the crises, are at risk now not to supply the prices per ton of CER according to the contracted ERPA. It shows us that the risk assessment within the CDM has its own challenges and complexity and opportunity. Raymond Malcolm Oei, Ceo of Stern, Indonesia, January 2009

  3. Tendency Carbon CERs beyond 2012 What do these experiences tell us about carbon price projections for Phase III of the EU ETS? The Impact Assessment Report of the European Commission estimates that carbon prices will rise from €26/tCO2 in 2013 to €39/tCO2 by 2020. The EC’s forecasts were based mostly on data from previous years. Times have changed; financial market turmoil and the credit crunch have spread to the real economy. With most industrialized and emerging economies in contraction, industrial production and energy demand will decline, and CO2 emissions will decline correspondingly. In the meantime, oil prices have dropped precipitously since reaching a record-high of $147 in July 2008. Lower energy prices will disincentives the development of renewable energy sources, and hinder the effectiveness of energy efficiency policies. Overall, a reasonable estimate is that in Phase III, under the agreed CO2 cap, Renewable Energy Directive, Energy Efficiency Directive and the recent proposal of increasing the scope of international flexibility through the Kyoto project mechanisms, carbon prices will be in the range €20-€40 /t CO2, and more likely in the lower part of this range. Michael Grubb, Chief economist at the Carbon Trust, and Faculty of Economics, Cambridge University, December 2008

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