Weekly Posts

EUAs See Recovery Following Gas Supply Cut Concerns, PA Unlikely to be in RGGI Q3 Auction

2 Min. Read Time


Last week's EUA price drop on gas-cutting measures in Europe has seemed to cool down and the market appears to have recovered again.

The prices have found some support at €76 in recent sessions and seen continued upward momentum to reach €77.75 at 1100 GMT on Wednesday, while compliance buyers appear to be keen to build length now that the price has fallen below the year-to-date average of around €83.

Much of the market’s attention is focused on natural gas, where the status of the Nord Stream 1 pipeline remains subject to much speculation.

The pipeline was said to be operating at 20% of capacity early this week after coming out of a maintenance turnaround, though some participants also felt that Moscow was deliberately throttling back the pipeline’s capacity in order to ramp up pressure on Europe to lift sanctions.


UK Allowance prices dipped at the end of last week as traders prepared for the fortnightly auction. UKAs tend to fall ahead of the sales as participants look to buy below the prevailing market trend.

In the mid-term UKAs may find endogenous support from the country’s energy mix which is already heavily gas-based thanks to the country’s North Sea reserves. The country also imports a significant volume of LNG to its three terminals, which is why UKA prices are likely to be resilient in the coming weeks and months.


Trading volume was particularly high in California, with more than 44 million CCAs trading on ICE Futures during the week, the most since early March.

The spike in demand was put down to futures prices falling below the average settlement price for the last three auctions, highlighting a key compliance strategy of buying in the secondary market whenever levels fall below the de-facto floor price.

Also, State governor Gavin Newsom has written to Air Resources Board Chair Liane Randolph calling for "even bolder action than outlined in the draft [Scoping] plan." Newsom requested enhanced action on offshore wind, domestic heat pumps, sustainable aviation fuels, and carbon capture, resulting in upward price pressure for CCAs.


RGA prices stabilized after recent drops as participants kept a watching brief over legal arguments surrounding Pennsylvania’s participation in the regional market.

The state Commonwealth Court reversed a decision last week to lift an injunction that had allowed Pennsylvania to officially join RGGI.

The reversal means that the state’s participation in the next quarterly auction, in which it was to have sold 16 million allowances, is now uncertain. Legal challenges at the state Supreme Court remain to be heard.


The Integrity Council for Voluntary Carbon Market (IC-VCM) opened its public consultation on Wednesday for the highly anticipated draft set of Core Carbon Principles (CCPs), Assessment Framework (AF), and Assessment Procedure, seeking to guide integrity on the supply side of the VCM market.

With enough buy-in from the market, the CCP’s are able to provide a much-needed benchmark to assess the quality of an offset, resulting in higher trust and upward price pressure for voluntary offsets.

Learn more about how to get involved in the public consultation on ICVCM’s website:  https://icvcm.org/public-consultation/

Despite the good news VCM prices have come under pressure in the latter stages of last week as concerns continued to mount over rising inflation and the risk of a recession.

The mid-long-term outlook for offsets is still positive as an increasing number of integrity initiatives are being drafted and a growing number of companies and countries are committing to achieve net zero by 2050, many of them planning to use offsets to hit their goals.