Market update

In our view, the NZU market remains strongly supported by New Zealand's increasing ambition - now underpinned by a credible accountability and delivery framework, a tough penalty regime for compliance entities and increased financial interest driven by both disclosure and investor pressure.  The lack of clarity about how the NZETS will interact with or connect to other markets does present some ongoing risk, given the range of prices we see within the G20 is wide - from US$3 - $80.  There's a sense of the rising carbon tide floating all boats, but we should not forget that carbon pricing, while extending its coverage of emissions year on year, continues to vary enormously across jurisdictions.  

Overnight EUAs pushed a fresh high, clearing €73 (NZD $119) for front year contracts, according to Carbon-Pulse. Meanwhile California Carbon allowances have fallen following reports that last week's auction volume cleared at US$28.26 - a significant discount to previous levels on the secondary market. 

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