Emissions Trading / Carbon Market News (11/06/2019)

Dear Sir or Madam,

The German government seems to be forced by the climate protection protests and the success of the Greens to rethink their climate policy. For September, it has therefore announced far-reaching fundamental decisions. Chancellor Angela Merkel even spoke of “disruptive changes”. The CSU environmental expert Anja Weisgerber announced in this context an extensive climate protection package, which should be decided later this year. Federal Environment Minister Svenja Schulze had already submitted a draft of a Climate Protection Act in which the sectors housing, transport, industry and agriculture should be held accountable. However, CO2 pricing should be regulated in the European context, which in our view makes sense, as national unilateral action could force the economy to relocate.

Extending emissions trading to other sectors while maintaining the current level of allowances would raise prices significantly, but such decisions would have to pass through the EU’s decision-making bodies, which would take time. At the same time, it is by no means certain that such aspirations will be fruitful in current political developments. Therefore, the fall will be interesting, because then will show what the Federal German Chancellor regards as a disruption – a very strong concept by their standards. Since her chancellorship is now coming to an end, it would not be surprising that she now wants to tackle something that should optimize her place in the history books.

The fact that EU emissions trading works because of higher prices is also demonstrated by the decline in CO2 emissions from the stationary systems involved. Last year, they caused 3.5% less emissions, equivalent to 422 million tons. In particular, the energy industry, which generates 70% of the greenhouse gas emissions of CO2 traffickers, has made considerable savings here, not least because of the increased share of renewable energies.

In the past trading week, the prices for the emission of one tonne of CO2 increased only insignificantly despite a high auction volume of almost 16 million EUA. Due to the Whitsun Monday, only three auctions will take place this week at the Leipzig EEX, in which a total of 8,760,000 EUA will be on offer.

(Average Quotes Exchange / OTC)      
Instrument 31/05/20119 07/06/2019 Change
EUA (Spotmarket) 24.41 EUR 24.44 EUR +0.03 EUR
EUA (December-2019-Future) 24.46 EUR 24.51 EUR +0.05 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 61.64 USD 63.18 USD +1.54 USD
EURO (Currency, Forex) 1.1167 USD 1.1332 USD +0.0165 USD

(The average exchange quotes and OTC-prices shows the average between bids and ask of several exchanges and OTC markets for carbon emission rights in the ETS. Bid and ask has usually in Spot Market a visible spread. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. Crude Oil and Euro Currency shows day-end-exchange quotes. This market information has just an informational character and are no advice or offer to trade carbon emission rights or their futures and options. If you want to unsubscribe, please reply to this mail.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Advantag Services GmbH