Eu Carbon price loses 40% of its value in one day

EUA_projected_1-24-13

What today’s closing graph may look like: A Tiljander-Mann hockey stick

Hmmm, looks like they might read WUWT, that headline below looks familiar.

CO2 prices in freefall as traders despair over EU vote
24 Jan 2013 11:26 Last updated: 24 Jan 2013 13:44

LONDON, Jan 24 (Reuters Point Carbon) – European carbon prices went into freefall on Thursday, dropping 40 percent at one point to a record low 2.81 euros, after members of the EU Parliament’s industry committee voted against a plan to rescue the ailing market.  http://www.pointcarbon.com/news/reutersnews/1.2151825

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Yesterday’s close was 4.74 euros. The market hasn’t closed yet, so there could be some rebound. I could also win the lottery today. I think not on both counts though:

EU ETS fix hangs in balance as MEPs urge rejection

24 Jan 2013 15:10

BRUSSELS, Jan 24 (Reuters Point Carbon) – A proposal to rescue the ailing EU carbon market hung in the balance on Thursday as a committee of lawmakers urged the bloc’s parliament to reject the so-called backloading plan in a vote that sent carbon prices crashing to record lows.

http://www.pointcarbon.com/news/1.2152161

UPDATE: that market has closed, and here is the news:

EU carbon prices climb back after 40 pct freefall

EUCarbon_1-24-13Capture
24 Jan 2013 17:34

LONDON, Jan 24 (Reuters Point Carbon) – European carbon prices were down around 4 percent on Thursday afternoon after freefalling by as much as 40 percent to a record low 2.81 euros earlier, after EU parliamentarians voted against a plan to rescue the ailing market.

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Some short term fools rushed in to hopefully make a profit. I predict a further price slide tomorrow.

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29 Responses to Eu Carbon price loses 40% of its value in one day

  1. Mark J Dietl says:

    BWAHH HAHAHAHAHAHA!!!

  2. michael hart says:

    I’d love to know the sordid details about the buyers and sellers.

    Someone is probably taking a deserved haircut. It’s been forced on the rest of us, now it’s their turn.

  3. Peter Miller says:

    Stupid Ecoloon concepts versus the Market.

    The market always wins – eventually!

  4. Edwin Crockford says:

    You may be interested that (from http://www.reuters.com/article/2013/01/24/us-eu-ets-idUSBRE90N0EG20130124):

    “Launched in 2005, the scheme is now in its third trading phase and is legislated to run until at least 2020, which means it cannot be dismantled even if prices crash to zero.”

    “In volatile trade, they later climbed back above 4 euros.”

    “Many speculative traders set their stop-loss positions at 5 euros and when carbon prices fell below that level, it triggered automatic sales without buyers.”

    “The news itself did not justify such a freefall, it was mostly due to this technicality,” the trader added.”

    So just another bunch of traders with models that don’t work that well.

  5. Chris Beal @NJ_Snow_Fan says:

    I guess people read what I posted yesterday about the timing and world bank report on global temps that came out on 11/19/2012. Worthless paper dumping and ENRON like BS trading. I hope Al Gore owns that junk but my feeling he is one of the be fat cat shorts in that market hinnen by some big hedge fund.

  6. Paddy says:

    The market collapse should give Gerry Brown nightmares. His CA budget is built in large part upon anticipated revenue from CA’s cap and trade system.

  7. Ron Dean says:

    Yes, but if you “Tijander” the graph, it’s a hockey stick!

  8. BrianJay says:

    No No Anthony you have to INVERT the data ….now repeat after me.

    BTW it seems that California has over 4 times the that the Bakken has, and Jerry fired the regulator that wanted to block development. What is going on?

  9. A.D. Everard says:

    About bloody time.

  10. Stephan says:

    Now that is a hockey stick that I cab support!

  11. Big D in TX says:

    Mark J Dietl says:
    January 24, 2013 at 7:17 am
    BWAHH HAHAHAHAHAHA!!!
    *******************************************

    Came here to say that.
    I work for a company in the states that, among other things, sells carbon offsets…..(yeah. I know.) I wonder how/if/when this might start to affect that part of our business.

  12. John R. Walker says:

    It closed at 4.4 Euros but the market seems to be rattled…

    http://www.pointcarbon.com/news/1.2152357

  13. knr says:

    You can bet steps are already afoot to bail this market out somehow , has lots of EU officials where looking to stick their noses in this bucket of swill.

  14. Jimbo says:

    Selling!!! Whose buying? ;-)

  15. Jason Miller says:

    ” I could also win the lottery today.”

    Have you bought your ticket yet? You can’t win if you don’t play.

  16. wucash says:

    I literally fell over laughing.

  17. Mike says:

    Carbon trading and renewable energies are government backed ponzi schemes.

    Australia and the US are in the midst of a shale oil and shale gas boom, Australia announced yesterday in one oil field near Coober Pedy there is likely to be twice as much oil as that of Iraq. Fossil fuel prices are reviving the economies of the US and driving economies of Australia, China etc, while the EU is about to be left in the dark ages of renewable energies and rogue environmentalism.

    EU crisis 2 is around the corner, the carbon trading ponzi is just the first victim. Coupled with the UK’s referendum on the EU, the ongoing euro fiscal crisis, there is not one single positive in the EU’s favor, even Germany the stalwart of the EU is in trouble, they built a renewable energy ponzi scheme.

    http://joannenova.com.au/2013/01/breaking-major-shale-oil-find-in-south-australia-geopolitical-shift-coming/

  18. DirkH says:

    Yay! Cheap carbon! We’re rich!

  19. Mike says:

    “Yay! Cheap carbon! We’re rich!”

    :)

    The Commies have discovered iron pyrite.

  20. john says:

    Regarding HFT here is a really good way to keep an eye on it…

    http://sceeto.com

  21. John M says:

    Gee, do you suppose this is why Al Gore had to sell his TV network?

    On second thought…

    nah, for the collapse in carbon markets to have hurt him, he would have had to have invested his own money.

  22. mfo says:

    Apologies in advance to all those WUWT readers who already know all of the following.

    Between 2005 and 2010 the market in carbon allowances in the EU increased from a turnover of €6 billion to €90 billion.

    The commencement of carbon trading in the EU caused large fluctuations in the price of carbon allowances. This resulted in the use of derivatives to protect buyers against what they feared would be steep rises in the price of carbon allowances.

    In fact most transactions in carbon dioxide emission allowances in the EU are in the form of derivatives which mainly take the form of Futures and Options.

    An Option is the ‘right’ to buy or sell a specific amount of allowances, at a fixed price, on a future date. A Future is an ‘obligation’ to buy or sell a specific number of allowances, at a fixed price, on a future date.

    The difference is simply that an Option is merely a ‘right’ whilst a Future is an ‘obligation’. Another form of trading of allowances is called ‘spot transactions’ which is for the immediate transfer of allowances to the buyer.

    Derivatives are preferred to spot transactions because derivatives, unlike spot transactions, are subject to EU financial markets regulations. Nevertheless the markets have been open to considerable abuse, particularly fraud in spot transactions. Other types of abuse comprised insider dealing, market manipulation and money laundering.

    “Market abuse arises in circumstances where investors have been unreasonably disadvantaged, directly or indirectly, by others who; have used information which is not publicly available (insider dealing); have distorted the price-setting mechanism of financial instruments; have disseminated false or misleading information.”
    http://europa.eu/legislation_summaries/internal_market/single_market_services/financial_services_transactions_in_securities/l24035_en.htm

    The EU, to combat such abuse proposed a Market Abuse Regulation and a Criminal Sanctions for Market Abuse Directive. In addition professional intermediaries are to be required to apply customer due diligence in accordance with the Anti-Money Laundering Directive.
    http://europa.eu/rapid/press-release_MEMO-11-719_en.htm

    “Internal Market and Services Commissioner Michel Barnier said: “Insider dealers and market manipulators will be liable for criminal sanctions throughout the European Union. Today’s agreement (07 Dec 2012) by Justice Ministers sends a strong signal that market abuse, including the manipulation of benchmarks, will not be tolerated.”
    http://europa.eu/rapid/press-release_MEMO-12-963_en.htm?locale=en

    “The European Energy Exchange (EEX) recently hosted a Panel Discussion on “The European Carbon Market in 2012” for journalists in Brussels……….. In particular, the discussion considered the current state of the EU ETS, asking whether its effectiveness is at stake at current price levels, and whether this is a case for political intervention (e.g. for a “set-aside” of emission allowances).”
    http://www.eex.com/en/Press%20Room

    The market has decided on a price which politicians dislike, so they’re going to try and rig the market to raise the price. Some people might say this is also an abuse of the market. But then it was never a genuine market in the first place.
    http://www.eex.com/en/Press%20Room/Press-Conferences

  23. RossP says:

    Isn’t it great. They sell this system as a free market answer to an environmental “problem” but as soon as it gets into trouble they run to the Government with their hands out for a rescue. The sooner it collapses completely and the idiots get cleaned out, the better for everyone.

  24. Mike says:

    Reblogged this on This Got My Attention and commented:
    EU carbon price takes a nosedive! So much for that.

  25. john says:

    mfo says:
    January 24, 2013 at 4:12 pm

    Thanks mfo. Well said and great links!

    john from DB

  26. Gunga Din says:

    Jason Miller says:
    January 24, 2013 at 11:25 am
    ” I could also win the lottery today.”

    Have you bought your ticket yet? You can’t win if you don’t play.

    ===========================================================================
    You also can’t lose.

  27. Keitho says:

    Looks like the manipulators are trying hard to rig the market but I think they will fail . . .

    http://www.guardian.co.uk/environment/2013/jan/24/eu-carbon-price-crash-record-low

  28. wayne Job says:

    From what I have observed of this EU carbon trading it would appear that the majority of the trading has been money laundering and tax evasion. This scheme of a green wet dream is a night mare stealing money from those least able to pay.

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