Carbon reaches EUR100 in Cal23 – a new all-time high as power generation demands more coal and gas

By Frank O. Brannvoll, Brannvoll ApS, Denmark

The EUA Dec 22 has set a new all-time high at EUR98.50, driven by real demand for compliance as especially coal but also gas are increasingly filling the gap left by a drop in nuclear-based power in France. To ensure sufficient baseload electricity, several coal-fired plants are being restarted. 

However, financial players continue to make up ~35 per cent of the market and are only buyers with a target towards EUR100. It will be interesting to see if there will be profit-taking when the geopolitical tensions hopefully fade.

Forecasters are increasingly lifting their targets for 2022 and 2023 and are now targeting EUR130 and even EUR200 based on real demand.

Germany is expected to have emitted 33Mt of CO₂ more in 2021, representing an increase of five per cent YoY.

EUA front-year contract, November 2019-February 2022

The EUA December 2022 contract increased 12 per cent to EUR95.80, compared to the previous month. Resistance is at EUR98.50 and EUR100-105, while support is at EUR90 and EUR86, and major at EUR70. The expected range is between EUR90 and EUR105. 

Brannvoll ApS forecasts for 2022 a trading range EUR65-100, with an average of EUR80. To be revised if the EUR100 barrier is broken.