EU Carbon Allowance Auction Fails

The EU auctioned 3.268 million tons of spot carbon allowances on the European Energy Exchange on Monday, with a transaction price of €78.66 per ton. The auction's cover ratio was 1.46, a significant decrease from the 1.83 in last week's German auction, but slightly higher than the 1.43 in early October's Polish auction. The current transaction price fell slightly from the €79.2 in last week's German auction, reflecting a weakening of market participation. A comparison of data from three auctions shows regional differentiation in carbon allowance demand, with the German market maintaining the highest subscription enthusiasm. Carbon price fluctuations and changes in the subscription ratio are becoming important indicators of the actual effectiveness of European energy policies.