Emissions Trading / Carbon Market News (26/08/2019)

Dear Sir or Madam,

On the last day of the G7 conference in Biarritz, France, climate protection is on the program. After the experience of the past with Mr Trump, it is no wonder that for the first time in the history of the summit, no joint final declaration is planned. All the more surprising is the news that the US President plans to enrich the host’s compulsory press conference this afternoon with his presence, which would also be a novelty.

The Senator of Vermont and presidential candidate for the Democrats 2020, on the other hand, presented a resolution on climate change last Thursday, setting out the goals and principles for the US fight against climate change. Unlike the incumbent president, Sanders recognizes that climate change is a major concern and that the United States must reduce its greenhouse gas emissions to zero by the middle of the century. As the news portal vox.com reported, most of the other presidential candidates have set the year 2050 as the target for carbon neutrality. Sanders’ plan, however, also sets an interim target: By 2030, transport and power generation, the two largest sources of emissions in the US, should be decarbonised, reducing US emissions by 71 percent. The plan also provides for the US to help developing countries reduce their emissions by 36 percent by 2030.

In the market for European Pollution Rights, the Bears also set the tone last week. Apparently under the impression of the further escalating trade dispute between the US and China, the price of oil has clearly given way and thus no turnaround could be initiated for EUAs. At the London ICE, a price of just under 25 euros was even called in the short term, which represents a nine-week low. The massive price increase in June and July was thus completely consumed. In today’s early trading, however, the market is clearly up and has already gained almost 50 cents.

  (Average Quotes Exchange / OTC)      
Instrument 16/08/2019 23/08/2019 Change
EUA (Spotmarket) 26.00 EUR 25.15 EUR -0.85 EUR
EUA (December-2019-Future) 25.96 EUR 25.10 EUR -0.86 EUR
CER (Spotmarket) 0.20 EUR 0.20 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 58.94 USD 58.20 USD -0.74 USD
EURO (Currency, Forex) 1.1097 USD 1.1153 USD +0.0056 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 (19/08/2019)

Dear Sir or Madam,

There is now growing awareness that for economies worldwide it is far more expensive to ignore climate change than to take countermeasures as soon as possible, which are economically damaging in the short term. Crop failure caused by periods of drought, flood damage, forest dying and even lack of snow in the mountains are already causing economic losses, which are even life threatening for companies. In addition, there are the already foreseeable burdens due to mass migration of people who are increasingly losing their livelihoods. Whenever politicians or lobbyists still reluctant to take swift political action to save money, the bill will not work out.

Many of the scenarios that scientists have been forecasting for years have even proven to be overly optimistic. According to recent satellite image and field observations, Swiss researchers have calculated that more than 300 million tonnes of ice melt every year. Iceland has even declared the world’s first glacier as dead. This means that his ice mass has become so light that he can no longer push forward. The glacier has not, as often observed, only regressed, but has become a simple, further melting ice field. The report recalls the fate of Lake Chad, which has shrunk by 90 percent since the 1970s, as a once-powerful and vital source of water supply for the region.

A look at the past trading week reveals an astonishingly sharp correction in the price of CO2 that we have not experienced for years in a month with reduced auction volumes. After being able to guess a rise above the 30-euro mark at the beginning of August, the bears took over the market and melted the important support at 28 euros, just like the aforementioned polar ice. At the London ICE the lowest price was EUR 25.87, a price level which we last saw one month before.

(Average Quotes Exchange / OTC)      
Instrument 09/08/2019 16/08/2019 Change
EUA (Spotmarket) 28.09 EUR 26.00 EUR -2.09 EUR
EUA (December-2019-Future) 28.12 EUR 25.96 EUR -2.16 EUR
CER (Spotmarket) 0.21 EUR 0.20 EUR -0.01 EUR
ICE Brent Crude Oil (Benchmark Future) 58.30 USD 58.94 USD +0.64 USD
EURO (Currency, Forex) 1.1202 USD 1.1097 USD -0.0105 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 (05/08/2019)

Dear Sir or Madam,

The steering effect of the persistently high price for CO2 emission certificates was targeted by politicians for many years and is now finally realized. Throughout Europe, energy producers must face the fact that coal-fired power generation is no longer competitive. Last week, RWE announced that it would close a 1.56 GW coal-fired power plant in the UK on 31/03/2020. With this measure, only four coal power plants remain in operation on the island. The United Kingdom, however, is aiming to cease coal production by 2025.

From Germany, the Federal Association of the energy industry reported that in June for the first time in five years in a month more electricity was imported than exported. The reason for this is also that electricity from coal is no longer cheaper than electricity from gas-fired power plants or renewable energies.

Meanwhile, in the Czech Republic, a governmental advisory council has been set up in the spirit of a coal commission to work out suggestions on how the changed market situation can be accommodated.

In the European Emissions Trading Scheme it was the introduction of the Market Stability Reserve that triggered the rapid price increase. Similarly, further control measures would now have to be bravely conceived and swiftly implemented so that areas such as agriculture and transport, above all aviation, are decarbonised as quickly as possible.

The annual halving of auction volumes in August led to a rebound in the price in the past trading week. After the consolidation phase, which pushed the price well below 28 euros by the middle of the week, the interest in buying picked up sharply on Thursday by more than five percent. It is quite likely that the market will not only test the € 30 mark again in the course of the month, but that it can also be overcome.

(Average Quotes Exchange / OTC)      
Instrument 26/07/2019 02/08/2019 Change
EUA (Spotmarket) 28.25 EUR 29.23 EUR +0.98 EUR
EUA (December-2019-Future) 28.29 EUR 29.26 EUR +0.97 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 63.23 USD 61.29 USD -1.94 USD
EURO (Currency, Forex) 1.1131 USD 1.1109 USD -0.0022 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