Market Report | June 2023

REGO 

  • As expected, the CP21 market drifted downwards as the Fuel Mix Disclosure deadline approached, but with a few spikes in pricing, a couple of the more prominent players struggled to cover large, last-minute positions. 
  • The OTC nature of the market and the resulting lack of transparency saw some of the biggest price spreads we’ve seen, presenting opportunities and headaches for buyers and sellers. 
  • Now that CP21 is done, there has been more focus on CP22, with bids around £10/REGO for W/S/H being circulated in the market. Spot pricing for Biomass edged above £9/REGO, with longer-term 1-year “pay as produce” offtake deals still in the £8s. 
  • Interestingly, the number of CP21s still with the producers after the FMD deadline was well down on CP20, suggesting that end users are using more REGOs. 

“CP21 prices ended relatively strong compared to the previous year with a few players waiting until the last minute to cover their positions.”

Mike Ridler, Head of Green Markets at C-Zero
Mike Ridler
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REGOs traded by C-Zero

“Not much to write home about in June with prices and liquidity stagnating“

Mike Ridler

RGGO

  • RGGO trades have been thin this month as buyers find they can get EU certs cheaper, and sellers aren’t moving on price. 
  • Waste certs seem to have stabilised at around the £26-28/MWh level, but there have only been a handful of trades to base that on.
  • RGGOs from 100% waste plants and with ISCC accreditation command a premium of £3-4/MWh. The days of a £10 premium for ISCC seem to be over. 
  • The strong demand for Crop seen at the beginning of the year has dried up, with prices peaking at around £25/MWh and certs being offered at lower levels towards the end of the month.
  • The GHG protocol used by 90% of Fortune 500 companies to calculate emissions has delayed any decision on the proposed changes to Annex B, which would no longer allow Green Gas Certificates to offset Scope 2 emissions. They will decide in 2025, which is good news for the RGGO market and companies buying RGGOs to offset emissions.

“2022 certificates fly with short supply and a major’s short position”

Bruce Brown

Bruce Brown

Head of Client Partnership at C-Zero
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RTFC market lacking liquidity and trades

  • The RTFC market in the last month has seen two very different stories in 2022 vs 2023 certs, with 2023 staying reasonably flat in the low 20s/high teens and 2022 certs skyrocketing to over 40p. 
  • The main drivers for the 2022 prices increasing so much has been a natural tightness in supply, with no real large holders left, combined with an oil major coming to market with a significant short position driving offers from the low-mid 20s through to low 40s.
  • RTFC/RHI spread stands at 2.9p/KWh for waste-fed biomethane (based on 3p RHI), at current prices worth just over 5.9p/KWh for 2023 certificates.
  • Biodiesel prices have gradually increased over the last month, with spreads to ULSD increasing, increasing the cost of blending. That spread has backed off recently, meaning blending costs are around 21p.
  • Get in touch if you’re looking for up-to-date pricing and certificate bids.