Month: December 2020

Dear Sir or Madam,

a mutation of the Covid-19 virus has occurred in Great Britain, which is why the British government is trying to seal off the clusters. In addition, France has closed the Eurotunnel and both Germany and Austria have imposed entry stops on aircraft from the island.

This is likely to affect the British economically even before a very likely hard Brexit. However, this is not only associated with economic uncertainties for the British in the coming weeks, but is also likely to have a negative impact on the EU financial markets in the remaining trading days of the end of 2020.

Starting next year, Great Britain will no longer participate in the European emissions trading system EUETS. After both a CO2 tax and emissions trading were up for grabs, the government has now decided on its own CO2 trading system. There will be a minimum price of GBP 15 per ton in the UK ETS and the CO2 certificates will be auctioned on the London ICE as usual.

The affected sectors in Great Britain are now to be reduced by 24% from 155 million tonnes in the coming year to 117.5 million tonnes of CO2e in 2030 using the cap-and-trade mechanism.

However, it is unclear whether the British emissions trading system should be linked to the EU ETS in a similar way to the Swiss emissions trading system and will certainly depend on the outcome of the extended Brexit negotiations.

Last week, the prices for EU emission rights showed a new all-time high of EUR 32.50 per EUA for the high-volume December 2021 contract and the trading week also ended with a visible plus, which in addition to higher energy prices also came with the end of the auctions related.

The ongoing uncertainties regarding the Brexit negotiations and the further development of the pandemic as well as the new British virus mutation will certainly continue to affect trade in the Christmas week. The new week therefore started with a clear minus of more than 3% and some speculators could also use this to take profits.

(Average Quotes Exchange / OTC)
Instrument	11/12/2020	18/12/2020	Change
EUA (Spot-Market)	30.48 EUR	30.92 EUR	+0.44 EUR
EUA (December-2021-Future)	30.52 EUR	31.10 EUR	+0.58 EUR
CER (Spot-Market)	0.31 EUR	0.36 EUR	+0.05 EUR
ICE Brent Crude Oil (Benchmark Future)	49.96 USD	52.26 USD	+2.30 USD
EURO (Currency, Forex)	1.2108 USD	1.2255 USD	+0.0147 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

Dear Sir or Madam,

In September the European Commission proposed that greenhouse gas emissions in the EU should be reduced by at least 55 percent by 2030 compared to 1990 levels. The previous goal was 40 percent. The new target was based on a comprehensive impact assessment of the social, economic and environmental impacts. This showed that 55 percent fewer emissions are realistic and feasible. The new climate target is now intended to help support Europe’s economic recovery from the coronavirus pandemic.

Even if critics do not go far enough, the European Union has set a milestone with today’s decision and has ended the use of fossil fuels for energy generation in the medium term.

And yes, it would be naive to call for further reductions, because the necessary transformation of society in the post-corona society of Europe will already unsettle quite a few people and without the willingness of the masses to implement any plan, however good it may be, would fail miserably . One only has to think of the cheap populists who are already in the starting blocks to classify climate change as an ideology and to present scientific evidence as unproven despite the greatest possible international consensus.

It was by no means a matter of course that an agreement could take place at EU level, it required a lot of debates and culminated in a night of negotiations, since every EU nation naturally pursues its own interests and still has to be taken along. The German Chancellor Angela Merkel and the French President Emanuel Macron were among the most important supporters, who ultimately prevailed.

As with all urgent EU decisions, a very significant point was the question of funding. Here, the EU fund with 750 million is intended to pave the way to a more sustainable and European economy.

In the run-up to this decision, the market for European CO2 emission rights has positioned itself clearly bullish and set an exclamation mark on Friday last week with an all-time high of 31.30 euros per EUA and this was already exceeded again in today’s early trading.

The market also sees the fact that the Brexit negotiations, which should be concluded by yesterday, are being extended as positive. Only the renewed lockdown in Germany and the failure of the Brexit negotiations are among the factors this week that could put a stop to the bullish market events.

Today, Monday, the last 3,959,500 EUAs for this year will be auctioned at the Leipzig EEX.

(Average Quotes Exchange / OTC)
Instrument	04/11/2020	11/12/2020	Change
EUA (Spot-Market)	30.11 EUR	30.48 EUR	+0.37 EUR
EUA (December-2020-Future)	30.11 EUR	30.52 EUR	+0.41 EUR
CER (Spot-Market)	0.30 EUR	0.31 EUR	+0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	49.06 USD	49.96 USD	+0.90 USD
EURO (Currency, Forex)	1.2122 USD	1.2108 USD	-0.0014 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

Dear Sir or Madam,

In recent months, the issues of the corona pandemic, the US presidential election and unregulated Brexit have hit the CO2 market hard. Looking at the current news situation, unfortunately none of these issues has yet been finally stamped as settled: The extremely difficult political balancing act of trying to find appropriate yet effective measures to deal with the corona cases does not seem to have been successful in any European country. The recent speech by the outgoing US President Trump does not change the officially confirmed election results, but it does give a bad hint for the coming weeks. And the summit talks between Ursula von der Leyen and Boris Johnson also remained fruitless.

In the sum of these considerations, a significantly lower CO2 price could be below the 25-euro mark – but that is not the case. Instead, the market continued its rally that started at the beginning of November and recently broke through the psychologically important 30-euro mark again. In the search for reasons for this, the connection with the delay in forthcoming auctions and free allocations is naturally obvious, even if these fresh certificates from the fourth trading period could not be used for the current compliance anyway. And then there is the price of oil, which has also picked up speed again and is showing a remarkably similar course to that of pollution rights.

In addition, however, the political efforts to curb global warming have changed the landscape, as an online workshop of the European Commission on the future of the Market Stability Reserve (MSR) revealed a few days ago. Similar to the steering measures taken by OPEC+ countries to stabilise oil prices, the European Commission intends to keep a close eye on the efficiency of the MSF. It should serve as a robust instrument to achieve the net zero emissions target for 2050. To this end, the expert panel expects changes to the rules of the MSF next year, including its trigger levels and rate of uptake.

(Average Quotes Exchange / OTC)
Instrument	27/11/2020	04/12/2020	Change
EUA (Spot-Market)	28.13 EUR	30.11 EUR	+1.98 EUR
EUA (December-2020-Future)	28.13 EUR	30.11 EUR	+1.98 EUR
CER (Spot-Market)	0.29 EUR	0.30 EUR	+0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	48.17 USD	49.06 USD	+0.89 USD
EURO (Currency, Forex)	1.1963 USD	1.2122 USD	+0.0159 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