Market Report | May 2023

REGO 

  • After a big sell-off at the end of April to just below £4/REGO W/S/H, prices rebounded strongly as GOs strengthed, prompting traders to take GOs profits and buy REGOs to cover their obligations. 
  • Prices stayed relatively strong for most of May in the mid to high £5s, but with one auction site closing its books with 500GWh of unsold REGOs, prices will likely soften.
  • CP 22 has strengthed with sellers looking to put pressure on the psychologically significant £10/REGO mark. W/S/H was trading in the mid £9s at the end of the month.
  • More wind assets coming online this year might put pressure on pricing, but there needs to be a clear consensus from market participants regarding which direction the market will go. 

“Another hectic month on the REGO markets with up and down like a yo-yo.”

Mike Ridler, Head of Green Markets at C-Zero
Mike Ridler
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“For the first time in 2 years, it looks like waste and crop prices could reach near parity “

Mike Ridler

RGGO

  • The collapse in Waste cert pricing continues, falling £7-8/MWh since the beginning of 2023.
  • Several sellers are choosing to sell at market prices for cashflow reasons and in anticipation of prices falling further.
  • Strong demand for Crops has continued to push prices, but the falling Waste prices should cap them.
  • Crop and Waste are now near parity as green gas prices in the EU weaken, making importing UK certs less attractive.
  • There is still demand from non-traditional players in the market, i.e., corporates looking to green up their gas consumption, which might add some support to pricing.
  • One of the biggest Green Gas suppliers and traders in Europe announced that they were going into a Protective Shield Agreement (similar to US Chapter 11) to re-structure their business due to harsh trading conditions due to the effect on the Gas market of the Ukraine war. Although still trading, they were one of the biggest buyers of UK green gas certs in 2022; the effect remains to be seen! 

“Month of flat pricing with feedstock market evidently oversupplied.”

Bruce Brown

Bruce Brown

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

  • RTFC market in the last month has been reasonably stagnant, with little movement in pricing for either 2022 or 2023 certificates hovering around 25p and 21p, respectively.
  • Again, Biodiesel prices have remained flat from May to June. However, YoY, there has been a 50% drop in both UCOME and RME, which explains the RTFC pricing drop over the period. The feedstock market is currently oversupplied, keeping a lid on prices.
  • RTFC/RHI spread stands at 2.5p/KWh for waste-fed biomethane (based on 3p RHI) at current prices worth just over 5.5p/KWh for 2023 certificates.
  • Even though there is feedstock oversupply in the market, there are moves to limit Chinese biodiesel imports due to the lack of transparency on the origination of double-counting biodiesel flows that have been flooding Europe, which has impacted the UK and European production facilities. Watch this space, as that could positively impact prices if action is taken. 
  • Get in touch if you’re looking for up-to-date pricing and Bids for certificates.