Month: July 2021

Dear Sir or Madam,

Just last week we were able to report on positive movements in coal consumption and CO2 emissions. However, there are hardly appropriate words to comment on the tragic events in connection with the extreme weather conditions in Germany, the Netherlands, Belgium and Austria in a carbon market report. We can only hope that politicians and lobbyists, who until now have always found pseudo-justifications for a stereotypical “business as usual”, will now use all their intelligence and energy to implement climate neutrality measures as quickly as possible. No job can be as valuable as a human life and no positive corporate balance sheet can outweigh the damage caused by the power of nature when it turns against man.

This is directly linked to the hope that the measures summarised by the EU Commission under the leitmotif “Fit for 55″ will not be ” improved” on the way to legal form, as has been the case up to now, until hardly anything of their substance remains. The opposite should now be the case.

With the measures, which were presented last Wednesday by no less than five EU Commissioners together with Commission President Ursula von der Leyen and her responsible representative Frans Timmermans, the EU Commission wants to achieve the climate targets for 2030. By then, emissions of greenhouse gases are to be reduced by 55 percent compared to 1990. According to Ms von der Leyen, this would make Europe the first continent to present a comprehensive architecture for achieving its climate goals. And just as in Europe the extreme heat and forest fires on other continents are being taken note of, in the USA, China and wherever else the events from the Eifel should be understood as something like a final warning.

A look at the carbon market last week leads via the oil price. After the producing nations known as Opec+ settled their dispute and agreed on a significant increase in oil production in view of the recovery of the world economy, the oil price consequently fell by several dollars. This also pulled the CO2 price a little further down. However, there was no clear correction, but rather led to a sideward movement, which seems to be waiting for a clear price signal.

(Average Quotes Exchange / OTC)
Instrument	09.07.21	16.07.21	Change
EUA (Spot-Market)	54.17 EUR	52.87 EUR	-1.30 EUR
EUA (December-2021-Future)	54.26 EUR	52.96 EUR	-1.30 EUR
CER (Voluntary Spot-Market ø)	2.66 USD	2.66 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	14.99 USD	14.99 USD	+0.00 USD
ICE Brent Crude Oil (Benchmark Future)	75.62 USD	73.20 USD	-2.42 USD
EURO (Currency, Forex)	1.1876 USD	1.1805 USD	-0.0059 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,

Last year, global carbon emissions fell more sharply within a year than they have since World War II, as the oil company BP published in a report.

The Covid-19 pandemic has significantly reduced economic activity globally and thus also the demand for fossil fuels.

Global emissions of CO2 or its equivalents (CO2e) amounted to 32.28 billion tons in 2020, a visible decrease of 2.1 billion tons or 6.3% compared to 2019.

Europe in particular recorded an above-average decline with over 12% to 3.59 billion tonnes. Here Greece led with minus 27%; Germany’s emissions, on the other hand, only fell by 11.5%.

But also in North America, 12% less was emitted, with the USA being one of the largest global emitters after China. China, on the other hand, even had an increase of 89 million tons or 0.6% compared to the previous year.

So if greenhouse-gas emissions could continue to decrease over the next 30 years as they did last year, global CO2 emissions would decrease by around 85% by 2050 and the Paris climate target of 2°C warming could still be achieved. However, it is unfortunately likely that the global economy and increased travel will lead to higher emissions again.

In particular, the decline in oil demand with a minus of more than 9% had an effect here. In particular, the demand for kerosene fell by 40% and for gasoline by 13%.

At the same time, electricity generation from wind and solar energy rose by 358 TWh, which was the largest annual increase. Of this, around half of the growth was recorded in China.

Not least, this meant that global consumption of coal could be reduced by 4.2% or 6 million tons compared to 2019. In Germany, coal consumption fell by a total of 18%, largely thanks to CO2 emissions trading.

This showed a small crash in the past week and thus offered good opportunities to cover your portfolio with EUAs. On Tuesday, the December contract fell significantly from EUR 58.31 to a low of 52.20; on Thursday the low was even at 50.87 euros. Towards the end of the trading week, however, prices recovered significantly and closed above the EUR 54 mark.

(Average Quotes Exchange / OTC)
Instrument	02.07.21	09.07.21	Change
EUA (Spot-Market)	57.24 EUR	54.17 EUR	-3.07 EUR
EUA (December-2021-Future)	57.35 EUR	54.26 EUR	-3.09 EUR
CER (Voluntary Spot-Market ø)	2.66 USD	2.66 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	14.99 USD	14.99 USD	+0.00 USD
ICE Brent Crude Oil (Benchmark Future)	76.11 USD	75.62 USD	-0.49 USD
EURO (Currency, Forex)	1.1864 USD	1.1876 USD	+0.0012 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,

Extreme weather events occur significantly more frequently due to the lower temperature differences between the equator, temperate latitudes on the one hand and the Arctic on the other due to climate change.

One of these extremes is now evident in Canada. In the area around Vancouver, British Columbia, temperatures rose to 49.5°Celsius, which has just cost more than 130 people. Cities on the US west coast, such as Oregon, Seattle and Portland, also recorded the highest temperatures ever recorded since the weather records began there.

After the state of Texas only caused astonishment with icy temperatures and snow in mid-February, the heat wave in the north is another illustration of what will happen to us in the context of climate change in the coming decades.

In the EU, plans to expand EU emissions trading are becoming more concrete in order to reduce the effects of climate change. The future involvement of shipping, road transport and the building sector seems certain. According to media reports, a draft law by the EU Commission indicates that the shipping industry is to be incorporated directly into the existing EU emissions trading system. When integrating maritime transport into the existing ETS, the draft proposes a transition period of three years. A new system of its own is to be set up for the transport and building sector by 2025, which could function similarly to the German national emissions trading system (nEHS). Only later is this to be merged with today’s EU ETS in order to only gradually increase the financial consequences for the economy and citizens. The German nEHS is expected to be seamlessly transferred to this with the start of EU trade.

In contrast to the EU ETS, this new area of ​​emissions trading should no longer contain any free allocation of certificates. The allocation of emission rights will take place via an auction, as in Germany’s nEHS. Here, parts of the auction proceeds are to flow into a fund that mitigates the social consequences and at the same time is to be used to provide financial support to the states in converting their energy generation to renewable energies.

Last week, the prices for EU emission rights returned to the 60-Euro-mark and, at 58.64 euros per ton of CO2e, marked a new all-time high in the December 21 contract, closing with a weekly increase of 4.2%. The new trading week also starts in the green area above the 58-Euro-mark.

(Average Quotes Exchange / OTC)
Instrument	25.06.21	02.07.21	Change
EUA (Spot-Market)	54.92 EUR	57.24 EUR	+2.32 EUR
EUA (December-2021-Future)	55.05 EUR	57.35 EUR	+2.30 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)	76.11 USD	76.11 USD	+0.00 USD
EURO (Currency, Forex)	1.1936 USD	1.1864 USD	-0.0072 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