After the volatility of the last few weeks, the EUA market consolidated in a very tight range between 5.11 €/t and 5.20 €/t last week, closing slightly lower at 5.14 €/t. The biggest news last week was fundamentally bearish, with the EEX announcing that it has reached an agreement with Poland to resume the sale of that country’s EUAs. The first auction of Polish EUAs since August 2016 will see 5.74 Mt offered on 29 March. In total, Poland will offer 85.9 Mt of EUAs across 2017, with EU-wide monthly auctions now mostly 10 Mt larger than those in Q1 17 as Poland adds in those unsold 2016 volumes. The resumption of Polish auctions resolves a key uncertainty for price formation, and these extra sales should start to weigh on the market when they resume next week. Some 44.5 Mt will be auctioned this week and next, which is the largest offering for a pair of weeks since 2013. With other fundamentals not hugely changed, the further increase in auction volumes could well be the trigger we expect for a move downwards out of the current trading range that has largely seen prices stay above the 5 €/t level. While the Polish auctions story was the big news for the market, other headlines were mixed. Reports that the EU was considering tougher energy efficiency measures, which would encourage lower energy use and emissions, were bearish. On the other hand, reports that suggested the UK would need a separate bill to leave the EU ETS, and that it was considering ‘replicating EUA structures’, were a little more supportive. Despite those remarks from Westminster, we still think it is more likely that the UK installations exit the EU ETS rather than stay in. Both the energy efficiency and Brexit issues retain a large amount of uncertainty and would really only affect the market sometime post-2019.