Month: July 2022

Dear Madam or Sir,

The German Federal Ministry for the Environment published a study last week which came to the conclusion that drought, heat and heavy rain have caused damage of more than 80 billion euros in Germany alone in recent years.

Since 2000, an average of at least 6.6 billion in damage has occurred in Germany every year. In particular, the extraordinarily hot and dry summers of 2018 and 2019 and the flash floods and floods in July 2021 contributed 40 billion euros to this. Around 35 billion euros in damage was caused by the heat and drought in 2018 and 2019 alone. In addition, damage of around 5 billion euros was caused by isolated storm and hail events.

And if you look at the drought and heat waves of the summer of 2022 so far, with many days above 30°C, this year will also cause immense costs in Europe.

Uncertainty about gas supply and the European emergency plan sent prices for European carbon emission allowances plummeting in the past trading week. On a weekly close basis, they are down 10.3%, breaking through key chart technical support lines.

However, it currently looks as if the price is stabilizing in the area above EUR 76 and it would not be surprising if prices were to move back towards the EUR 80 mark in the short term.

(Average Quotes Exchange / OTC)
Instrument	15/07/22	22/07/22	Change
EUA (Spot-Market)	85.16 EUR	76.36 EUR	-8.80 EUR
EUA (December-2022-Future)	85.38 EUR	76.60 EUR	-8.78 EUR
VCU (Voluntary Carbon Units ø)	8.63 USD	8.07 USD	-0.56 USD
VER (Gold Standard Spotmarkt ø)	3.74 USD	3.35 USD	-0.39 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	100.99 USD	103.58 USD	+2.59 USD
EURO (Currency, Forex)	1.0064 USD	1.0161 USD	+0.0097 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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 Madam or Sir,

Climate change is leading to major problems in Europe this summer. In the past few weeks, southern Europe has been hit by an exceptional heat wave with temperatures around 40°C and drought, with Italy, Spain and Portugal leading the way. This led to forest fires in many places, which are difficult to contain due to the hot and dry wind and spread quickly.

Northern Italy has been in a state of emergency for weeks, as one heat wave follows the next and there is no precipitation. There is a visible lack of water in Lake Maggiore and at Lake Garda and the first regions have already restricted the consumption of drinking water, such as Milan, Venice and Verona. In the Po Valley, 30 percent of all Italian agricultural production is threatened this year and the region is experiencing its worst drought in 70 years. In addition to the Ukraine war, this is likely to have a further impact on the already high global food prices.

This week, the heat wave is also coming to Germany, with temperatures of almost 40°C, where there is already a water shortage in many regions and the risk of forest fires is increasing day by day. Great Britain meanwhile fears temperature records of around 40°C this week.

The 13th Petersberg Climate Dialogue has been taking place since yesterday and will be attended by around 40 ministers from a wide variety of countries. This year it is taking place at the German Federal Foreign Office and is being hosted by Germany and Egypt, where the World Climate Conference (COP27) will take place in autumn. It remains to be seen whether there will be significant results at a time when coal-fired power generation is supposed to secure Germany’s energy supply.

The market for European carbon emission allowances last week recouped the losses of the previous week and the EUA closed above the 85-euro mark with continued low volatility. The price gains were accompanied by a euro, which briefly traded below the US$ 1 mark at 0.9951 last Thursday, and an oil price (Brent variety), which marked a short-term low of under US$ 96, a price that was last seen in February. The euro is still under pressure on energy supply risks and oil fell sharply after the US suggested a maximum price for Russian Ural oil in a range of US$ 40 – US$ 60 per barrel.

In this trading week there is once again the full volume of a total of 11.5 million EUAs, which are auctioned at the European Energy Exchange on all five trading days. In the next week there will then be 8.8 million EUAs before the annual halving of the auction volume occurs in August and alternately 5.7 million or 4.4 million EUAs are offered for auction.

(Average Quotes Exchange / OTC)
Instrument	08/07/22	15/07/22	Change
EUA (Spot-Market)	82.55 EUR	82.55 EUR	+2.61 EUR
EUA (December-2022-Future)	82.79 EUR	82.79 EUR	+2.59 EUR
VCU (Voluntary Carbon Units ø)	8.83 USD	8.83 USD	-0.20 USD
VER (Gold Standard Spotmarkt ø)	3.96 USD	3.96 USD	-0.22 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	107.05 USD	107.05 USD	-6.06 USD
EURO (Currency, Forex)	1.0182 USD	1.0182 USD	-0.0118 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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 Madam or Sir,

The votes in the European Parliament last Wednesday regarding the classification of nuclear power plants and gas-fired power plants have now paved the way for classifying them as climate-friendly in accordance with the EU taxonomy regulation. Only 278 of the required 353 votes against were cast. It is extremely unlikely that this will now be prevented by the member states in the final vote. This classification now allows investors to invest in such technologies again. It remains to be seen to what extent this classification will negatively affect the further expansion of renewable energies in Europe.

The supply of gas is currently an urgent problem, as it is still not clear how security of supply in Germany and the other EU countries is to be guaranteed during the colder months of the year. In addition, the potential for social upheaval should not be underestimated, since low-income households in particular will hardly be able to cope with the already extremely high energy costs.

One of the reasons for the shortage of gas is the supply from Nord Stream I, which has been significantly reduced for weeks, which, according to Russian information, is due to technical problems. Since this morning, due to the installation of a turbine from Canada and further maintenance work, no gas has flowed through the pipeline for the scheduled 10 days. It remains to be seen whether, once the repairs have been completed, gas will again be supplied.

The Euro fell to a 20-year low of USD 1.0072 last Friday in the face of European problems linked to energy supply insecurity. The financial markets are also reacting bearishly, so it is no wonder that concerns about the economy are contributing to the fact that the prices for European emission certificates are also showing losses compared to the previous week, which, however, can be described as moderate in view of the negative environment.

In the coming week, auctions for a total of 8.8 million EUAs will take place at the Leipzig EEX, which is 2.7 million fewer emission allowances than in the following week.

(Average Quotes Exchange / OTC)
Instrument	01/07/22	08/07/22	Change
EUA (Spot-Market)	85.37 EUR	82.55 EUR	-2.82 EUR
EUA (December-2022-Future)	85.58 EUR	82.79 EUR	-2.79 EUR
VCU (Voluntary Carbon Units ø)	8.85 USD	8.83 USD	-0.02 USD
VER (Gold Standard Spotmarkt ø)	4.11 USD	3.96 USD	-0.15 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	111.55 USD	107.05 USD	-4.50 USD
EURO (Currency, Forex)	1.0424 USD	1.0182 USD	-0.0242 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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 Madam or Sir,

Since humans settled down around 12,000 years ago, the number of trees worldwide has declined by 46%. There are currently around 400 trees per person, but this number is falling due to ongoing deforestation and increasing world population.

Since forests and trees are extremely important for the reduction of greenhouse gases, city planners in particular should plan more green in the cities. However, more trees in the cities not only plays an important role because of the reduction in greenhouse gases, but also to reduce the temperatures in German cities. Because in cities like Vienna, London or Berlin, the temperature in the inner cities has risen by an average of 3°C since 1960.

But also climate protection projects, which are financed by carbon credits from voluntary emissions trading and, for example, enable afforestation in Asia, Africa or South America, can make a significant contribution here.

The prices for carbon emission allowances in the obligatory European emissions trading system have been above the 90 euro mark several times in the past week, but towards the end of the trading week profit-taking caused a significant drop in prices.

This week, auctions with a total volume of 11,488,500 EUAs will be held on the Leipzig EEX on all five trading days.

(Average Quotes Exchange / OTC)
Instrument	24/06/22	01/07/22	Change
EUA (Spot-Market)	83.29 EUR	85.37 EUR	+2.08 EUR
EUA (December-2022-Future)	83.43 EUR	85.58 EUR	+2.15 EUR
VCU (Voluntary Carbon Units ø)	8.78 USD	8.85 USD	+0.07 USD
VER (Gold Standard Spotmarkt ø)	3.96 USD	4.11 USD	+0.15 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	113.05 USD	111.55 USD	-1.50 USD
EURO (Currency, Forex)	1.0506 USD	1.0424 USD	-0.0082 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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