NZ Carbon market update

Friday 17 Nov 2017

“NZUs settled at $19.25 on Friday - holding the highs for the year. It’s gone a bit quiet as we sit up here but this market will punch higher in the short term simply because we see few sellers coming to market – which is unusual given the price level” says Nigel Brunel, Director - Institutional Commodities, OMF.

“NZUs remain cheap in the short, medium and long term. There will be more demand coming as we head into the end of Q4 and the beginning of Q1 where emitters have to finalise the year’s emissions. In addition, settings move from 27 million tonnes to 33 million starting in six weeks”.

“We expect our government to return from Bonn and start ratcheting up ambition for our ETS which will see the price cap raised or removed, a cap on emissions, possibly a phase in of agriculture and a phase out of grandfathering. NZUs look like a market where “you never stop out, you never take profit.”

“The annual climate change negotiations in Bonn (COP23) are well underway with the second and final week about to begin. This is the government-end of the conference and the most important part of all COP negotiations. The number one take-away so far is that most of the USA remains committed to curbing global warming (being states, cities, businesses and universities) adding Washington is “unable to stop us”.

Source: OMF

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