Dear Ladies and Gentlemen,
Looking back to 2021, the carbon market has risen by over 140% since the beginning of the year. This significant price increase is largely due to the influence of numerous speculative investors. Hedge funds have made huge profits with their investments in European pollution rights in the past year and will continue to have a significant influence on price developments in the coming years. Companies that are under obligation to comply under the ETS have already felt the pain and must now – sooner than perhaps expected – adapt their strategic decisions to this high and further rising price level. In addition, so-called activist hedge funds seem to be exerting direct pressure on companies by pushing as shareholders to enforce more environmental protection in the companies. Obviously, the funds have realised that, due to the political environment and public perception, environmentally damaging corporate activities are also damaging to the company’s image and sales and lead to an economic dead end.
On Monday of the past trading week, the reference futures contract expired and the switch to the December 22 contract caused the price to rise significantly. The bullish market was also supported by news from the gas sector, so that as a result the 80-euro mark was again clearly overcome. In the course of the trading week, however, this level could not be maintained. During the auction-free period at the turn of the year, many traders’ desks were not busy, so that high volatility in the thin trading led to a nervous price movement. In the end, most of the initial gains were absorbed again.
| (Average Quotes Exchange / OTC) | |||
| Instrument | 17/12/21 | 24/12/21 | Change |
| EUA (Spot-Market) | 73.28 EUR | 76.84 EUR | +3.56 EUR |
| EUA (December-2021-Future) | 73.28 EUR | 76.87 EUR | +3.59 EUR |
| VCU (Voluntary Carbon Units ø) | 7.98 USD | 7.98 USD | +0.00 USD |
| VER (Gold Standard Spotmarkt ø) | 8.53 USD | 8.53 USD | +0.00 USD |
| nEZ (German National Carbon Units) | 25.00 EUR | 25.00 EUR | +0.00 EUR |
| ICE Brent Crude Oil (Benchmark Future) | 73.08 USD | 75.60 USD | +2.52 USD |
| EURO (Currency, Forex) | 1.1237 USD | 1.1328 USD | +0.0919 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. VCUs and VERs are average prices (CBL markets). 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