According to Martin Bursik, Minister of Environment, European Commission (EC) could cut quota of CO2 allowances in NAP II. (2008-2012) for the Czech Republic by 15% to 85-86m tons. Furthermore he sees that Poles could expect even more significant cut than the Czech Republic. EC should decide about both national quotas today at 12:00 (CET).
Our view:
In recent days there have been several speculations that the Czech Republic could see cut to 86-82m tons. Note that even though the allocation for the Czech Republic will be announced today, the exact allocation for CEZ won’t be known for some time as local government could decide on cutting allocations proportionally for each sector or re-shuffle them to reflect better their needs. In the best case scenario CEZ would like to receive 40m tons of CO2 allowances, however this level doesn’t seem to be realistic and based on fact that CEZ received some 36.5% of 97m tons (i.e. 35.4m) in NAP I. it could happen that CEZ will be short and would explain CEZ’s recent buying policy of CO2 allowances for NAP II. In the worst case secenario CEZ recently said it could break even if receving the same amount of CO2 allowances as in NAP I.