Revenues from trading emission allowances from installations (EUA) in the second quarter of 2020 amounted to EUR 95.7M or by 13.6% less than in the same period of 2019, as indicated by the European Energy Exchange (EEX) data for Bulgaria. The reason is attributed to the overall drop in emission prices within this period of 2020 as a result of COVID-19 impact on energy markets.
On monthly basis, the highest revenues were reached in June, EUR 40M.
In the second quarter, emission allowance auctions started at a price of EUR 17.52/t CO2, moving up to EUR 25.99/t CO2 by the end of June. This represents the highest price since the beginning of the year. Within the entire month of June prices never went down below EUR 20/t CO2, a price typical for April and May. It seems that emission allowance trading has begun to shake away COVID-19 impact, and together with the investments planned under Market Stability Reserve has led to price rise up to the levels of January 2020.
Revenues from emission allowance trading – an important element of EWRC pricing policy
Emission allowance revenues are also an important tool to stimulate low-carbon development in Bulgaria. The Energy System Security Fund receives 100% (up to June 2016 – 77%) of the auctioned greenhouse gas emission allowances allocated to Republic of Bulgaria and the amounts are used to reduce the Obligation to Society price. Upon determining prices in the Energy sector (Decision TS19/1 July 2019), the energy regulator projected emission allowance revenues to reach BGN 861 450 (EUR 440M) within the time period of 1 July 2019-30 June 2020. Proceeds from trading between July 2019 and June 2020 amounted to BGN 841M or by BGN 20M less than anticipated. According to the decision on prices dated 1 July 2020 (TS-29/1 July 2020), emission allowance revenues are expected to be BGN 793M in the forthcoming regulatory period (1 July 2020 – 30 June 2021).