Market Report | October 2024

REGO

• Market is still relatively flat with poor liquidity
• Approx 300GWh of REGOs remained unsold in October’s auction.
• A mild and windy start to winter is resulting in above forecasted levels of generation to date. However, as always there is weather uncertainty as we move further into the season with long term forecasts being typically unreliable.
• Starting to see some interest from suppliers and corporates although they have yet to come to market.
• CP22 is currently achieving around £1.75/REGO.
• CP23 is currently trading between £4 – £4.55/REGO.
• CP24 is currently trading between £4 – £4.60/REGO

RGGO

• RGGOs trades continued to be steady in October with prices of 2024 Waste and Crop remaining stable.
• Crop/Product continued in the mid £7s/MWh mark and non-ISCC Waste/Resi mid £10s/MWh.
• Most of the demand has been for 2023 production with prices rising modestly as buyers seek the cheapest RGGOs available.
• European buyers continue to show interest in ISCC volumes but mostly for forward production and delivery in 2025-26, price indications for ISCC waste low €20s, approx. £18/MWh
• The EU has reversed its decision to outlaw the Swedish tax exemption scheme for imports of Biogas. They had ruled in December 2022 that the Swedish tax scheme was unlawful, which was a major factor in UK RGGO prices dropping steeply in 2023 and 24 as a significant volume of RGGOs being imported into Europe were sent to Sweden.
• This reversal could drive the price of EU certs higher but there is still quite a big overhang in supply. UK RGGO prices could follow but the issues to do with the Union Database and importing UK RGGOs into the EU remain, which could limit gains in the short term.

Please see our latest blog:

What is the circular economy – and how can environmental certificates help to ‘close the loop’?

Carbon

• A pessimistic economic outlook in the EU resulted in poor industrial demand, contributing to six-month lows for European carbon prices.
• Prices briefly dipped below €60/ton before recovering slightly to sit just above this level.
• The impact of a lack of demand for EUAs was compounded by rising auction volumes on the supply side.
• A fall in temperature, rising gas prices and return of demand may help to deliver a gradual price uplift over the next few months.
• Analysts are predicting that there could be a gas-to-coal switch following a potential halt in gas transit from Russia through Ukraine which would bolster EUA demand.

EUGO

• The EuGO market has maintained its downward trajectory, with certificates hitting their lowest level since May 2021.
• A lack of buying interest has meant that trades have been few and far between.
• Offers and bids for 2024 EuGOs have struggled to get above EUR0.40/MWh, with 2025 EuGOs trading just over 40 cents higher.
• The drop in the price of earlier vintages has now translated through to a drop in later vintages.
• Bearish sentiment seems set to stay for the time being.