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Agreement reached on EU emissions market reform


Agreement reached on EU emissions market reform

Report summary

On 5 May 2015, the European Council and Parliament reached agreement on the introduction of a Market Stability Reserve (MSR) measure to the EU Emissions Trading Scheme (ETS) from 2019. The introduction of the MSR represents a substantial reinforcement of the ETS and will drive a rebalancing of the carbon market's supply-demand balance. The cost of European emissions is likely to increase gradually in response to the MSR and high cost carbon will be a feature of the market in the long-term.

What's included?

This report includes 2 file(s)

  • Agreement reached on EU emissions market reform PDF - 336.83 KB 5 Pages, 0 Tables, 3 Figures
  • Agreement reached on EU emissions market reform.xls XLS - 2.88 MB

Description

This Power Markets Insight report highlights the key issues surrounding this topic, and draws out the implications for those involved.

For participants, suppliers and advisors who want to look at the trends, risks and issues within the power industry, this report gives you an expert opinion and analysis to help inform your decision making.

Wood Mackenzie's detailed analysis and reliable market forecasts provide a strong reference, enabling a quick and concise description about the relationship between this event and its implications.

Underpinned by our extensive gas, coal and oil markets research, Wood Mackenzie's detailed analysis and reliable market forecasts provide a reliable foundation for investments and corporate planning. We help you understand key regulatory and economic drivers, and emerging industry trends in the power industry.

  • Progress on EU emissions market reform
    • Rebalancing the EU emissions market
    • Europe finds common ground on reserve arrangements
    • The MSR will support higher emissions prices
      • ETS allowance (EUA) balance – with and without the market stability reverse
    • Higher emissions costs change the economics of power generation
      • Coal-gas parity costs in power – coal price cases (US$/t)
    • A long-term outlook of higher carbon costs makes investment in existing coal more difficult
    • Conclusions

In this report there are 3 tables or charts, including:

  • Progress on EU emissions market reform
    • Agreement reached on EU emissions market reform: Image 1
    • ETS (EUA) price forecast – comparing the H2 2014 outlook and MSR 2019 case
    • Agreement reached on EU emissions market reform: Image 3
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