Because market investors are betting on green energy

Because market investors are betting on green energy

Visions and forecasts on the moves of investors in the energy sector in an in-depth analysis of Bloomberg

Carbon speculators have probably returned to a market destined to be crushed by the climate ambitions of the European Union, Bloomberg writes. It's a bullish sign for a market that has gone up about 60% since the market hit bottom in mid-March, at the height of the lockdown in Europe. Now, with the opening up of economies, demand has been stimulated by financial operators, rather than by public or industrial service companies that still have a relatively low demand for permits.

"This suggests that financial investors are slowly returning," said BloombergNEF analyst Bo Qin. "We expect speculators to pick up in demand in the second half of 2020." The rise in prices occurred in an environment of unusually low energy demand. Most of the EU's carbon market permits to pollute are used by utilities they buy when they need to burn more fossil fuels for energy. The way the market is moving makes it appear that investors are starting to evaluate the role of the European carbon trading system in the EU's climate neutrality target, which in turn is a key pillar in the economic recovery plan. of the block of 750 billion euros (824 billion dollars). And as governments around the world step up efforts to slow global warming, the big oil company BP Plc has more than doubled the perceived cost of carbon emissions.

The British company revised its pricing prospects to include a $ 100 per tonne scenario by 2030 this week, quadrupling the current permit price in Europe. Today's situation is a reference to 2018, when the prices of emissions rose sharply, when financial investors obtained permits pending the EU to reduce the offer. Today, investors can anticipate similar bullish measures as part of the region's aggressive measures to reduce greenhouse gas emissions. "It means that people are taking the EU system seriously," said Louis Redshaw, CEO of Redshaw Advisors. "They think the system will become more rigid and they think the price will go up." Still, not everyone is convinced that speculators have returned. According to Nicolas Girod, CEO of ClearBlue Markets, it is possible that public services are only buying low-cost permits to use in the future. But if speculators come back, it could bring prices back to 30 euros a ton this year, he said.

(Excerpt from the international press review by Epr Comunicazione)

This is a machine translation from Italian language of a post published on Start Magazine at the URL on Sat, 20 Jun 2020 05:22:11 +0000.