New Carbon Finance (NCF) has released a report showing that the length in the emissions market is rarely coming to the market because of five key reasons:-

• Industry want to comply before they trade.
• Few Emissions managers are rewarded for making money but mainly for complying.
• Industry structures hamper trading as many companies would like a holistic approach between countries and this is against the way most companies are set up.
• Selling allowances only shows that they were over allocated in the first place.
• There is a mis-trust of intermediaries who wish to encourage the industrials to sell.

If we look at this en mass we can assume that 2007 prices should be heavily discounted because players will have to off-load the length they have. In fact the fourth reason is a reason for doing this now because if the market rushes into a sell environment then we will see market collapse and the European Commission imposing even stricter targets. The assumption that NAP's will be finalised and so the collapse after the NAP process is protection, is misguided as the EC could add a cultural saving cut across all NAP's. One suspects that if this were the case then the likes of the UK and Denmark who have been very compliant are likely to be heavily hit.