Santa has a problem: not only does he want to bring happiness and joy to especially nice people every Christmas, he also wants to take care of the environment.
Turns out, running a global gift delivery operation isn’t as green as Santa would like - especially when his elves rely on maritime transport to ship packages to warehouses across Europe. He’s been working for years on a cutting-edge alternative, but you know how it goes: innovation can’t be rushed. “It’s ready when it’s ready,” the elves always say. Meanwhile, Santa’s maritime logistics are critical for refilling his sleigh at European ports, ensuring every chimney gets its fair share of Christmas cheer.
And since there is a lot of traveling and heating around Christmas, including by Santa and his staff, a lot of CO2 is unfortunately also produced.
Now, Santa’s aircraft operations are a different story: Zero emissions, baby! Thanks to his ancient, self-flying sleigh powered by a fairy-and-stardust antimatter propulsion unit, he’s dodged the headaches of the European Emissions Trading System (ETS) for years. But here’s the kicker: as of 2024, maritime transport is also included in the ETS for CO2 allowances. And boy, did that catch Santa and his elves off guard.
To make up for this, Santa wants to make a CO2 compensation payment this year by buying CO2 certificates. But he is finding it difficult to predict the cost of these certificates.
CO2 allowances don’t come cheap, and Santa’s feeling the pinch. Inflation’s still wreaking havoc on his operations (“Christmas just isn’t what it used to be,” the old man always laments). To make matters worse, 2024’s budget is tighter than Rudolph’s harness.
Santa is naturally a price-conscious entrepreneur, so he needs the most precise forecasts possible for his overall cost breakdown - and he wants them now!
But Santa’s no quitter. To keep his sleigh bells ringing, he needs to buy EUA (European Emission Allowances) on the secondary market through continuous trading after Boxing Day. He’s hoping to lock in his orders before New Year’s, and since he’s thinking about expanding his deliveries to include Orthodox Christmas on January 6, 2025, he’d really like a prediction for EUA prices at the start of next year.
That's why he needs your help. Can you provide him with a model that predicts the cost of CO2 certificates for the Christmas season as accurately as possible?
Here’s the twist: [EUA spot market auctions for the primary market take place every Monday, Tuesday, and Thursday, with delivery the next day.](https://www.eex.com/fileadmin/EEX/Downloads/Trading/Calendar/Auction_Calendar/EEX_Auction_Calendar_2024_31.07.2024.pdf) The last auction of the year falls on Monday, December 16, 2024. Unfortunately, Santa can’t participate - he’ll be too busy managing his operations. So he’s planning to go big on EUA purchases after Boxing Day.
He is reaching out to his pals in the AIDAHO team. He sent a file with daily open, high, low and closing prices for the last years which his DALAHO elves provided with their Reuther Thompson EIKON licenses. Santa thinks the price history might be useful.
Santa needs a price predictions for the next 14 trading days after Christmas. Can you help Santa?
But keep it under wraps: Santa’s a whale in the EUA market. If you can get wind of his trading schedule, there might just be a profit in it for you ...
## The challenge
TBD
Predict market closing prices (point estimates) for EU Emission allowances for the 14 trading days after Christmas 2024.
## Submission and Submssion File
Please send your submission (code and solution file) to [aidaho@uni-hohenheim.de](mailto:aidaho@uni-hohenheim.de) or send us the link to your AIDAHO-Gitlab repo.
Please send your submission (solution file and possibly code) to [aidaho@uni-hohenheim.de](mailto:aidaho@uni-hohenheim.de) or send us the link to your AIDAHO-Gitlab repository containing the solution file.
The solution file is a CSV and should be structured as follows:
| Trading Day | Closing Price |
|:-----------:|:------------:|
| 1 | $\hat{p}_1$ |
| 2 | $\hat{p}_2$ |
| $\vdots$ | $\vdots$ |
| 14 | $\hat{p}_{14}$ |
| | |
TBD
where $\hat{p}_t$ are the price predictions.
## Evaluation
Your submission is scored on the Euclidean distance of your submitted path.
Your submission is scored on the Means Squared Error (MSE) of the submitted price predictions.
## Prizes
The submission with the shortest path will receive an AIDAHO t-shirt!
The submission with the lowest MSE will receive an AIDAHO t-shirt!
