Month: June 2021

Dear Sir or Madam,

According to market rumors, the European Commission is expected to present its new reform proposals for the European emissions trading system on July 14, 2021. The news service Bloomberg reports that the upper limit of the annual maximum emissions is to be reduced earlier than currently valid in order to be in line with the EU reduction target of 55% of greenhouse gas reductions compared to 1990 by 2030.

From 2026, the annual reduction factor is therefore to be increased from currently 2.2% of the reductions, and there is also to be a one-off reduction in the amount of allowances to be auctioned. The amount is not yet known.

The European Commission is also looking into how it can involve other sectors such as shipping, buildings and transport. Shipping is to be completely included in EU emissions trading from 2026.

Due to these first rumors and the continuing rise in oil prices, the prices for EUAs were again extremely bullish and moved towards 56 euros at the end of the last trading week. The trading week closed with a significant plus of more than 6% in a weekly comparison.

(Average Quotes Exchange / OTC)
Instrument	18.06.21	25.06.21	Change
EUA (Spot-Market)	51.80 EUR	54.92 EUR	+3.12 EUR
EUA (December-2021-Future)	51.90 EUR	55.05 EUR	+3.15 EUR
CER (Voluntary Spot-Market ø)	3.02 USD	3.02 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	15.86 USD	15.86 USD	+0.00 USD
ICE Brent Crude Oil (Benchmark Future)	73.23 USD	76.11 USD	+2.88 USD
EURO (Currency, Forex)	1.1862 USD	1.1936 USD	+0.0074 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. CERs and VERs are average prices in the voluntary carbon offsetting market (eco securities). 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,

It is always good news when the mechanisms used for climate protection are effective.

At the end of last week, the German Federal Environment Agency published facts and figures that prove that the plants included in emissions trading have reduced their greenhouse gas emissions by 33% since 2013.

Last year, the 1,817 stationary systems in Germany recorded in the European Emissions Trading System (EU-ETS) emitted around 320 million tons of carbon dioxide equivalents, which corresponds to a decrease of 12 percent compared to 2019, and even 33% compared to 2013. The energy industry, which is increasingly relying on renewable energies and is also more likely to convert gas than coal into electricity, has contributed to this, as the CO2 emissions per kilowatt hour are significantly lower here. In 2020, emissions from German energy systems fell by around 15 compared to the previous year.

Emissions also fell in industry in 2020, although the effects of the corona pandemic must be taken into account. Here emissions fell by 5% to 114 million tons of CO2e compared to the previous year. Accordingly, further activities are necessary to manifest this sustainably in the post-pandemic era.

In air traffic there was a significant decrease of 58% compared to 2019; here approx. 4 million tons of CO2 could be saved. It is to be hoped that the industry will be more climate-friendly in the future and that more climate-friendly fuels, which are also environmentally friendly, will be developed and used in the future. At least the successful use of video conferences and virtual general meetings should make a recognizable part of the flights of the past obsolete.

Emissions from aviation: The emissions of the aircraft operators managed by Germany amounted to around 4 million tons of carbon dioxide in 2020. This corresponds to a decrease of 58 percent compared to the previous year. This is due to the sharp decline in flights as a result of the Covid-19 pandemic.

Throughout the EU, the emissions of all plants participating in the EU ETS fell by 11% in 2020 compared to the previous year, and in energy generation by as much as 15%. Compared to 2005, the decrease in emissions from the corresponding plants was as much as 43%, which means that emissions trading achieves the intended steering effect with market-based means.

Last week, trading in European emission rights showed itself in a slightly downward wavy line and closed comfortably above the 50 Euro line at 51.80.

(Average Quotes Exchange / OTC)
Instrument	11.06.21	18.06.21	Change
EUA (Spot-Market)	52.74 EUR	51.80 EUR	-0.94 EUR
EUA (December-2021-Future)	52.67 EUR	51.90 EUR	-0.77 EUR
CER (Voluntary Spot-Market ø)	3.02 USD	3.02 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	15.86 USD	15.86 USD	+0.00 USD
ICE Brent Crude Oil (Benchmark Future)	72.58 USD	73.23 USD	+0.65 USD
EURO (Currency, Forex)	1.2107 USD	1.1862 USD	-0.0245 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. CERs and VERs are average prices in the voluntary carbon offsetting market. 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,

A report published last week once more commented critically on the practice of allocating free pollution rights to energy-intensive companies. This subsidy should protect domestic industries from disadvantages in global competition and prevent certain companies from relocating their production sites to countries where no CO2 tax is levied (carbon leakage).

It has long been criticized that as a result of these allocations, which at least initially fully covered the expected emission volumes, companies would be deprived of a significant incentive to improve their carbon footprint. In fact, emissions in these sectors have stagnated since the beginning of the third trading period in 2013, while significant reductions can be observed in sectors without these allocations.

It is obvious that state economic interests and climate protection are massively in each other’s way here and that those responsible must undoubtedly focus on this problem quickly and consistently in the sense of the proclaimed climate goals.

Irrespective of this, an absurd loophole in the system should be closed immediately. The EUAs allocated free of charge are not subject to any earmarking, which means that companies are free to convert surplus allowances into special revenues on the market. If free allocations exceed actual CO2 emissions, they should be usable for future years, but in no case saleable. While other companies must invest in sustainable, more environmentally friendly technologies in order to free themselves from the increasing financial burden of the CO2 levies, the companies receiving the gift can even cash in on the excess allowances. This cannot be the idea.

The technical problems in connection with the relocation of the ICE exchange from the UK to the Netherlands massively hindered trading during Monday, but the price nevertheless showed a strong recovery at the end of the day. The bullish trend continued in the following period and brought the price back to the level of the end of May, compensating the losses suffered until then. Only on the last trading day of the week the trend lost its momentum, but still closed with a plus of EUR 2.70.

(Average Quotes Exchange / OTC)
Instrument	04.06.21	11.06.21	Change
EUA (Spot-Market)	50.02 EUR	52.74 EUR	+2.72 EUR
EUA (December-2021-Future)	49.97 EUR	52.67 EUR	+2.70 EUR
CER (Voluntary Spot-Market ø)	2.95 USD	3.02 USD	+0.07 USD
VER (Gold Standard Spotmarkt ø)	14.52 USD	15.86 USD	+1.34 USD
ICE Brent Crude Oil (Benchmark Future)	71.62 USD	72.58 USD	+2.67 USD
EURO (Currency, Forex)	1.2165 USD	1.2107 USD	-0.0058 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. CERs and VERs are average prices in the voluntary carbon offsetting market. 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