Hot and bothered
Welcome to Carbon Risk — helping investors navigate 'The Currency of Decarbonisation'! 🏭
If you haven’t already subscribed please click on the link below. By subscribing you’ll join more than 5,000 people who already read Carbon Risk. Check out the Carbon Risk backstory and find out what other subscribers are saying.
You can also follow on LinkedIn, Bluesky, and Notes. The Carbon Risk referral program means you get rewarded for sharing the articles. Once you’ve read this article be sure to check out the table of contents [Start here].
Thanks for reading Carbon Risk and sharing my work! 🔥
Estimated reading time ~ 9 mins
Over the past 18 months the EU carbon price has been anchored close to the €70 mark. Whenever the EUA price has dropped towards €60, buyers have quickly stepped in and bid the market back up. Barring the odd natural gas fuelled price spike, few are willing to push the price beyond the late €70 mark, with investment funds quick to reposition for lower prices.
If the carbon price reflects Europe’s citizens concern over climate change, and trust in their governments commitment to do something about it, then it’s lukewarm at best at the moment. That’s very different from the continents weather right now, where many are about to swelter through the third heatwave of the summer.
In this post I highlight why a late summer return to recent highs may not be on the cards this year, how rising solar power generation capacity is affecting market dynamics, the potential for an exchange traded product supply squeeze, the disgruntled chemical industry bosses that could scupper it, and finally, whether we’re all really just frogs boiling away.