EUA prices remained sticky above the levels we expected. While little of fundamental note occurred, Brexit issues, always a good source of hyperbole, reared their head. The media has started to recognise that Brexit is likely to be problematic for EUA trade if there is no early notice of what might happen to UK installations. The immediate problem, if a ‘hard’ Brexit occurs, is that the UK installations will still have the same obligations to submit EUAs to the UK government until a UK law removes the need. This will be one point of the ‘Great Repeal Bill’. However, it is possible that, without a legal agreement on continued ETS participation, the UK registry could be detached from the others, meaning EUAs held in a UK account could only be transferred to other accounts within that registry. Effectively, this would mean that EUAs in UK registry accounts not needed by UK installations could be stranded, particularly if the UK then removes the ETS from the statute book. It could also mean that any outstanding sizeable derivative trades would face a huge delivery risk if they involve a participant wanting to deliver in or out of a UK-based account. So, a big market issue that could be solved if the UK registry is not immediately disconnected if the UK crashes out of the EU. Otherwise, the main exchanges will need to sort out the delivery risks on those far-dated EUA contracts. Early notice of what happens to UK installations is extremely unlikely, given that Brexit negotiations are likely to go to the wire. Even if talks are failing, neither side will admit a deeper agreement is not on the cards until the deadline expires. It seems politically impossible to give any notice either way until a deal is done. As such, market participants will need to use contract structures to help manage these risks.