Emissions Trading / Carbon Market News (2019-07-30)

Dear Sir or Madam,

The last week will remain in the collective memory of citizens in Germany and other European countries. Supported by a so-called omega weather situation, extremely hot air came from Africa to the north and caused rows of all-time heat records. In Germany, the highest value so far has been 40.3 degrees from the year 2015. But last Thursday, this mark was surpassed at 15 different weather stations. The highest temperature ever measured in Germany is now officially 42.6 degrees. Even without a calculator, it is easy to see what an immense leap this is.

And the CO2 market has not held back in terms of records in the past trading week. At the beginning of the week, the price was strong and rose constantly, falling just short of the 30 euro mark on Wednesday at EUR 29.95. In the second half of the week, profit taking pushed the price down again, but the persistent bullish sentiment has not yet disappeared from the market.

In fact, the high prices for European pollution rights are already having an effect. The Polish government, which, under the responsibility of the Justice and Justice Party (PiS), has once again pushed the political course towards coal-fired power generation, was forced by the persistently high prices of EUA to pass a law to relieve energy-intensive companies. With only one dissenting vote and six abstentions, it was decided to financially relieve foundries, paper mills, the chemical industry and other companies with the equivalent of around a quarter of a billion euros to be paid by the Polish taxpayer. In contrast, according to a Carbon Pulse report, coal output in Europe fell by 19% in the first half of the year as higher carbon prices and cheaper renewable energies displaced high-emission coal production in almost all countries.

(Average Quotes Exchange / OTC)      
Instrument 19/07/2019 26/07/2019 Change
EUA (Spotmarket) 28.85 EUR 28.25 EUR -0.60 EUR
EUA (December-2019-Future) 28.89 EUR 28.29 EUR -0.60 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 62.52 USD 63.23 USD +0.71 USD
EURO (Currency, Forex) 1.1220 USD 1.1131 USD -0.0089 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

Emissions Trading / Carbon Market News (22/07/2019)

Dear Sir or Madam,

The world’s most northerly weather station in the North of Canada experienced a very unusual heatwave last week, recording a record high of 21 ° C. The station is located at 82 degrees north latitude and is the northernmost permanently inhabited place on earth. This heat wave causes fires of unprecedented proportions to erupt in the Arctic.

The current data on the use of fossil fuels for power generation show how CO2 emissions trading serves climate protection. As a result of higher prices, 11.5 million tonnes of energy were produced in June 2019; in June 2018 it was still 17 million tons. This is particularly related to the fact that the rise in CO2 allowances has led to more than 60% increase in electricity produced by gas-fired power plants from 2.3 to 3.7 billion kilowatt hours.

According to the Fraunhofer Institute for Solar Energy Systems (ISE), the cost of generating lignite-fired power was 30-40 euros per megawatt-hour due to high CO2 prices, while electricity from gas-fired power plants is 24 – 28 euros. This is pleasing insofar as electricity from gas generates only half as much CO2 as is the case with lignite. The more expensive the CO2 certificates are, the less CO2 is emitted in power generation. At prices that would be well above the 30-euro mark, coal-fired power plants would be unprofitable and shut down for this reason alone. That would precede the coal exit in 2038.

Last week, the EUA continued to be bullish, peaking at EUR 29.50 at the beginning of the week. However, whether the 30-euro mark is to be tested depends on a strong market environment in the energy sector, with crude oil in particular currently weakening. At the start of the week, the EUA again rose above the 29 euro mark.

(Average Quotes Exchange / OTC)      
Instrument 12/07/2019 19/07/2019 Change
EUA (Spotmarket) 28.76 EUR 28.85 EUR +0.09 EUR
EUA (December-2019-Future) 28.79 EUR 28.89 EUR +0.10 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 66.79 USD 62.52 USD -4.27 USD
EURO (Currency, Forex) 1.1269 USD 1.1220 USD -0.0049 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

Emissions Trading / Carbon Market News (15/07/2019)

Dear Sir or Madam,

ETH Zurich wants to make the consequences of climate change more tangible and has shown the changes in climatic conditions in various cities in 2050. So who likes to travel from Berlin to San Marino in Italy due to the weather and spend his holidays there, can save himself in about 30 years, because in Berlin then the same conditions prevail and it will be uncomfortably hot in Italy. The climate of Madrid is comparable to that of today’s Marrakech and London will reach temperatures at the current level of Barcelona. So much for the pleasant news – however, a good quarter of the world’s cities will experience climatic conditions that are nowhere to be found anywhere else in the world, with high temperatures, droughts and extreme precipitation.

To mitigate this by reducing greenhouse gases to the level desired by the Paris Agreement on Climate Change, the Federal Council of Economic Experts, also known as the Five Wise Man, has prepared an opinion for the German Federal Government. In order to gain rapid control effects, they have recommended a CO2 tax on fuels and heating oil in order to price the emission of CO2 and act as an example internationally. Initially, the output of one tonne of CO2 should cost 50 euros and increase to 130 euros by 2030.

The better solution to a tax is, according to the industry, CO2 emission trading, but it will take too much time to be transposed into EU law, and action must be taken by the time other sectors are included in the EU emissions trading scheme Objectives of the climate change agreement. The Climate Cabinet of the Federal Government will meet next Thursday and will discuss concrete proposals for reducing CO2 emissions.

The prices for EU emission allowances have become significantly more expensive in the past week and marked a new 11-year high with more than 28 euros. Accompanied by rising energy prices, the market looks set to halve its auction volume in August, as well as the visible reduction in auction volumes during the last four months of the year. This week, EEX will be offering auctions totaling 15,964,000 EUA and 892,000 EUAA. In the coming week, there are 11,534,000 EUA and from Thursday the following week begins the halving of auction volumes taking place every summer.

(Average Quotes Exchange / OTC)      
Instrument 28/06/2019 05/07/2019 Change
EUA (Spotmarket) 26.23 EUR 26.33 EUR +0.10 EUR
EUA (December-2019-Future) 26.28 EUR 26.38 EUR +0.10 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 66.72 USD 64.49 USD -2.23 USD
EURO (Currency, Forex) 1.1371 USD 1.1229 USD -0.0142 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

Emissions Trading / Carbon Market News (08/07/2019)

Dear Sir or Madam,

Last Friday, the Federal Environment Ministry presented the results of three scientific studies on the socially responsible taxation of CO2 in Germany. Between the predominantly undisputed understanding that every person has to personally contribute something to the reduction of greenhouse gases and the trivial fact that people voluntarily seldom do so, an acceptable political solution should be found.

Federal Environment Minister Svenja Schulze has highlighted a so-called “climate premium” as a central result of the expert reports. The idea behind it is a kind of reward principle, which is supposed to serve as an engine for the reduction of CO2 and its equivalents already in obligatory European emissions trading. Theoretically, it should work in such a way that the carbon tax, which is still to be quantified, does not flow into the state as revenue, but is repaid in stages to the citizens. In the average case, a household would therefore receive the tax refunded in full. The variants are, however, in the actual carbon footprint. If this is significantly low, money is left over, but if you behave more damaging to the environment, the repayment is correspondingly lower. Thus, according to the common opinion of the scientists and the Minister, a steering effect for climate protection would be created. Whether this idea will be established as a wearable political model remains to be seen. However, the minister emphasized that climate change will not allow any further hesitation if parts of the earth should not become uninhabitable for humans.

Actually the transport and buildings sectors are reversing the savings in the energy sector. According to initial calculations by the German Energy Industry Association, in the first half of 2019 the share of renewables in electricity consumption was higher than ever before, which resulted in a 15 percent less CO2 emissions compared to the first half of 2018. However, this positive effect is already evaporating in Germany in the sectors that have not yet been regulated, which also includes the continuing rise in flying tourism. Unfortunately, development worldwide is still scary. This is shown by the absolute measurement results of the Mauna Loa Observatory in Hawaii. Recently, at 415.26 ppm, the highest concentration of CO2 in the earth’s atmosphere was measured since the beginning of records. The Observatory also pointed out that the three strongest climbs were seen in the past four years – which were also the four warmest years since recording began.

The market for European Pollution Rights has shown its unstable side in the past week. After a recovery period at the beginning of the week, the price rose to a high of 27.36 EUR, but was then significantly burdened by the usual quarterly technical sales. At a level of around EUR 25.70, the price was clearly supported again and was continuously rising up ever since. In today’s early trading, the December Future is already valued one euro higher.

(Average Quotes Exchange / OTC)      
Instrument 28/06/2019 05/07/2019 Change
EUA (Spotmarket) 26.23 EUR 26.33 EUR +0.10 EUR
EUA (December-2019-Future) 26.28 EUR 26.38 EUR +0.10 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 66.72 USD 64.49 USD -2.23 USD
EURO (Currency, Forex) 1.1371 USD 1.1229 USD -0.0142 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

Emissions Trading / Carbon Market News (01/07/2019)

Dear Sir or Madam,

The current heatwave in Europe is exceptional for the end of June. For example, 45.9 ° C was measured on Friday in Gallargues-le-Montueux in southern France, a new nationwide heat record. And also in Germany, the weather was much hotter last weekend than in June, yesterday in Bernburg 39.6 ° C were reached. The entire June in Germany was 4°C warmer than the long-term average and the continuing drought in parts of Germany endangered the drinking water supply of individual communities already at the beginning of the summer.

In the past week, the interim negotiations in Bonn ended, which should further advance the implementation of the Paris Agreement on Climate Change. At the same time, the World Climate Change Conference (COP25) was prepared in December in Santiago de Chile. An important point here were rules for the international emission trading markets, which, however, could not finally reach a draft resolution.

European emission allowances picked up again last week and ranged between EUR 25.21 and EUR 27.48. On a weekly basis, they closed with a gain of just under one euro. Last Tuesday, the auction on EEX of 2,775,500 EUA failed due to lack of demand, which is why these certificates were auctioned last Thursday and in three auctions this week. Thus, a total of 18,046,000 EUAs will be offered this week instead of the originally planned 15,964,000 EUAs.

(Average Quotes Exchange / OTC)      
Instrument 21/06/2019 28/06/2019 Change
EUA (Spotmarket) 25.24 EUR 26.23 EUR +0.99 EUR
EUA (December-2019-Future) 25.30 EUR 26.28 EUR +0.98 EUR
CER (Spotmarket) 0.20 EUR 0.21 EUR +0.01 EUR
ICE Brent Crude Oil (Benchmark Future) 62.25 USD 66.72 USD +1.47 USD
EURO (Currency, Forex) 1.1367 USD 1.1371 USD +0.0004 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