Market Report | February 2024

REGO 

  • Pricing of CP22 has remained relatively high over recent months (£12-£14) as we approach the end of the compliance period and energy suppliers look to cover positions for their fuel mix disclosures.
  •  However, we may start to see REGO prices drift downwards as favourable weather conditions contribute to an increase in supply and a lack of demand for REGOs to cover consumer green tariffs.
  • CP23 pricing took a recent hit as a significant generator sold 3 to 4 TW/h of wind/solar/hydro REGOs forward at around £7. With more wind/solar generation coming online in 2024 and consumers staying on their supplier’s floating standard variable tariff (due to anticipation that energy prices will drop), the forward outlook is REGO demand is likely to fall and supply to increase.

REGO Pricing CP22

“REGO prices look to be drifting downwards.”

Clare Haigh, Head of Environmental Markets at C-Zero
Clare Haigh
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“RGGO prices continue to decline as demand dries up.“

Clare Haigh
Clare Haigh, Head of Environmental Markets at C-Zero

RGGO

  • A lack of buyer demand continues to pressure biomethane, with persistently low buying interest weakening prices.

  • For 2023, production – waste certificate continue their decline to around the £9 mark and crop to circa £5

  • For 2024 production, waste certificate prices are around the £11-12 mark, and crop prices are circa £7.

  • The UK RGGO market has drifted downwards since the beginning of 2023. We believe several factors have contributed to this price decline

    • The EU ruled that Sweden could not offer a generous tax break to imports of Biogas since it had already been subsidised in the country of production. This slowed the transfer of RGGOs from the UK to Europe as there was a glut of Danish, Dutch, and German certificates that had previously entered the Swedish market.
    • BMP (a German Biogas trader and producer) was one of the biggest buyers of UK RGGOs in 2022. In mid-2023, special administrative measures were taken, and RGGO purchasing was halted.
    • Sentiment has been further dented by the ISCC changing the rules on measuring Biogas’s Carbon Intensity (CI), i.e., moving to a plant average across all feedstocks rather than a CI score for each feedstock.
    • An influx of biofuels from China has dampened demand for Biogas as a transport fuel, and the EU plans to implement a “Union Database” to track the sustainability criteria of the EU.