NOx Market Commentary: 2006 NOx Market Outlook
Since January, prices for vintage 2006 NOX allowances have fallen over 20 percent from a high of over $2,700 to current price levels of about $2,100. CERA anticipates that the conditions supporting this price decline will remain in effect until the new NOX markets established under the CAIR begin in 2009.
*Downward emissions trend to continue. Based on announced NOX controls and a range of expected utilization for the coal-fired plants, CERA anticipates that aggregate emissions will fall below the existing cap of 500,000 tons by 2008 at the latest.
* New CAIR markets to drive pricing. With a comfortable cushion of banked allowances in place for the next three ozone seasons, CERA believes the expected value of NOX allowances under CAIR will more directly affect pricing under the current NOX market over the next 12 months.
* Further price decline anticipated. CERA expects prices to move to a range of between $2,000 and $1,000 for all vintage allowances through the 2008 ozone season.
