Why are CCA’s weak YTD?

CCA futures are down 15% YTD. It’s been an interesting time with the price floating between supply overage and the appropriate tightening in CCAs. Nevertheless, we still remain bullish on CCAs, more so than for other carbon markets.

The last auction, however, didn’t support the prices above $30 per ton, which is that double-dip I've mentioned before. This correction shook out a lot of leveraged hot money, and that sort of money is now chasing cheaper assets in the offsets market (watch this space).

Another driver (though I think it’s a narrative being backfilled into the performance) is that with focus on containing inflation, these programs may not get as much support as they had seen previously. Of course, a lot of desks are just chalking this up to risk-off sentiment and rebalancing.