The vote of the Committee on Industry, Research and Energy of the European Parliament (ITRE) on the ‘set-aside’ of allowances is scheduled for today between 10:00 and 10:30. After passing the EP ENVI Committee in December 2011 and several documents leaking out and indicating that the plans could be accepted by the ITRE as well, the positive outcome has a quite high probability. In this case we expect a positive market reaction which can push EUA price to levels above EUR 10.00.
Significantly bigger price appreciation is not expected as (i) there are lots of uncertainties regarding the details and (ii) market priced in already the effect of the ITRE approval. After the positive market reaction, therefore a period of consolidation or price decrease cannot be excluded. Additionally, pressure on the price might be reinforced later on by the publication of verified emissions data by the end of next month, March 31.
In the case of a negative outcome of today’s vote the price could plummet immediately below EUR 8.00.
by Bernadett Papp, (Vertis)