Market Report | May 2025

REGO 

  • As CP23 draws to a close and the Ofgem FMD deadline looms, we are seeing buying interest dry up on WSH and Bio REGOs. However some last minute activity from suppliers is expected as they balance their REGOs against their final supply position.
  • The outlook remains long with plentiful certificates still available in the market – and it is not expected that any buying interest at this time will support a price increase.
  • As we look at future CPs, we have seen some significant volumes trading further along the curve as suppliers look to hedge their position, but overall the outlook looks bearish compared to CP23 and the start of CP24 as the demand outlook from energy suppliers and corporates remains much lower.
  • We are currently seeing the mid price at around:
    • CP23 – WSH £0.27p & Bio £0.16p
    • CP24 – WSH £0.85p & Bio £0.55p
    • CP25 – WSH £1.05p & Bio £0.70p
    • CP26 – WSH £1.95p & Bio £1.10p
    • CP27 – WSH £2.15p & Bio £1.80p

 

"The REGO market remains long"

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

“Cheap crop or certified waste seem to be the flavour of the month”

Mike Ridler Profile picture
Mike Ridler - CEO – Chief Executive Officer

RGGO

  • 2023 Crop and Waste demand dwindled over the course the last few months and prices fell to £Mid 5s / MWh.
  • There has been an uptick in demand for 2024 Crop, but bids are still in the low £6s.
  • ISCC accredited Waste and Crop demand saw a bit of a slowdown, but 2024 ISCC Waste has traded in the mid £12s recently.
  • There is niche demand for 2024/25 ISCC Crop, but buyers are only willing to pay a small premium over unaccredited volumes.
  • The market for 2024 Non-ISCC Waste is still extremely illiquid. We’ve seen trades done at a slight premium to 2024 Crop prices, but only for small volumes as producers dip their toes in the water to free up cashflow from their older volumes.
  • Longer-term demand is back again, with some buyers looking to lock in for 3-5 years offtakes, but currently only for ISCC Waste/Residue volumes and from 2026 or 2027 onwards. Limited deals have been done, but it’s rumoured that 3 years was concluded at circa £20/MWh, fixed price 2027 to 2029 inclusive.

 

“UK and EU ETS link boosts the UK market”

Susanne McKay - Green Market Manager

Carbon

  • Talk of potential trade wars made April a tumultuous month for global markets – with resultant concerns around growth for European economies. This bearish sentiment led to lower EU carbon prices during the start of the month.
  • Some easing of concerns around US tariffs helped the market to recover in late April and early May.
  • Speculation around the potential linking of the UK and EU ETS drove a significant increase in UK carbon prices, with prices climbing to a year high with the announcement that a broad-brush agreement had been reached.
  • The linking of the markets is expecting to lead to a convergence in EU and UK carbon pricing – with UK carbon prices ticking up to EU pricing levels – along with enhanced market stability and investor confidence, although timelines for the implementation of the link-up remain unclear.

 

“Higher activity fails to drive higher prices”

IMG_5090
CCO – Chief Commercial Officer

EuGo

  • Market activity was up on previous months, possibly on the back of the conclusion of the REC Market Meeting, which traditionally sees deals sealed after market participants meet face-to-face.
  • The European Power Exchange increased the frequency of GO auctions to 2 per month, reflecting this higher activity.
  • More deals didn’t translate through to higher prices however, with a generally bearish sentiment suppressing the forward curve, whilst spot prices have remained relatively stable in recent weeks.
  • The premium for future contracts reflects continued expectations that prices are due to rise over the coming year or two.