NZU update

Last week's announcements on the Climate Change Commission's advice on ETS unit limits and price control settings were big news for the market, and sent NZUs up almost $10 to touch $82.00 once again for the first time since February.

Since then spot NZU prices have settled back again, albeit just a little, because buyers are conscious that the Commission's recommendations still need to survive consultation, and to actually be acted upon by Government.  

There seems to be a reasonable expectation that this will be the case, because deviation from the Commission's advice does require the Government to formally explain itself. 

With the independent Climate Change Commission being the result of cross-party support, and so newly bedded in, it seems that there is little political gain to be made from undermining its conclusions in regard to the ETS.  But everyone in the market is conscious of the cost of living crisis and inflationary pressures. 

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