“Sentiment is the main thing. No one is really switching from gas to coal,” he said, referring to the often-cited fuel switch as a reason for the high EUA prices. But Christoph Braun of Bayern LB said he had found the gas-coal differential was developing in parallel to EUA prices.

Proof for the influence of sentiments was that there was a lot of talk now about Poland bringing additional certificates into the system. This was already influencing prices, Hüwener said. “Why did that not happen half a year ago?”

“Liquidity is the main solution for many of the problems we are seeing,” Hüwener said. He dismissed the idea of prices being manipulated by the big power generators to their own advantage. “There is no such thing as the big manipulator. People like to believe in it because it is easy.” He added that it also should not be forgotten that a large part of trading is done OTC rather than through the exchanges.

© Point Carbon 2005