Month: December 2022

Dear Madam or Sir,

We hope you had a peaceful and relaxing Christmas holiday.

Shipping will take part in EU emissions trading from 2024. The trialogue negotiations between the EU Parliament, the Commission and the Council of Ministers have finally reached an agreement and appropriate regulations have been adopted as part of the “Fit-for-55” package.

From January 1st, 2024, voyages by ships with more than 5,000 GT within the waters of the European Union will be 100% covered by EU emissions trading. Journeys between EU and non-EU ports are covered by 50% of their greenhouse gas emissions. Three emission allowances are to be calculated per one ton of fuel.

However, the inclusion in trading with European emission allowances is taking place step by step. In 2024, for example, only 40% will be subject to mandatory trading within the framework of the EU ETS, which will have to be settled with EU emission allowances (EUA/European Allowances). However, by 2025 it will already be 70% and from 2026 100% of emissions will be included.

This increases the volume of EU Emissions Trading System by around 7% or nearly 85 million tons annually.

The financial proceeds resulting from the inclusion of the certificates at the Leipzig EEX are to be used in Germany especially for the development of low-emission propulsion systems in shipping.

Earlier last week, the benchmark EU Emission Allowances contract expired and the December 2023 contract now occupies this position. Since no major political surprises are to be expected in the current shortened trading week, the quotes will be based more on the charts. Here we currently see a range between 87 and 95 euros as possible.

You know that we participate in the markets for mandatory CO2 emissions trading. However, we are also active in voluntary carbon emissions trading and offset greenhouse gas emissions for our customers.

In addition to direct contacts with operators of greenhouse-gas reduction projects, we are also a member of the Carbon TradeXchange (London/Melbourne) and therefore have access to currently more than three million carbon credits with a market value of more than nine million US dollars.

The prices of the certificates for voluntary compensation are currently as follows:

• VERRA VCS:              $2.46 to $12.60

• CDM-CER:                $0.74 to $20.00

• Gold Standard VER: $5.30 to $44.00

Please let us know, if you have any demand of voluntary carbon reduction. We will find the right projects for your business or private carbon offsetting.

(Average Quotes Exchange / OTC)
Instrument	16/12/22	23/12/22	Change
EUA (Spot-Market)	86.94 EUR	88.98 EUR	+2.04 EUR
EUA (December-2023-Future)	87.41 EUR	89.37 EUR	+1.95 EUR
VCU (Voluntary Carbon Units ø)	3.53 USD	3.81 USD	+0.28 USD
VER (Gold Standard Spotmarkt ø)	2.55 USD	2.75 USD	+0.20 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	79.18 USD	83.92 USD	+4.74 USD
EURO (Currency, Forex)	1.0585 USD	1.0614 USD	+0.0029 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 customers and business partners,

After two years shaped by Corona, which demanded a lot from everyone, we were looking forward to the end of the pandemic at the beginning of 2022.

Unfortunately, things got worse when Russia invaded Ukraine, which put us collectively back into a state of emergency and there is still no end in sight to this nightmare.

Despite all these new problems, we sincerely thank you for the good and trusting cooperation this year!

We wish you and your friends, family members, employees and colleagues a Merry Christmas and a good start into a hopefully peaceful, healthy and successful New Year 2023!

As in previous years, we do not want to give away any material things this year, but rather actively do something for climate protection in the interests of our little blue planet by promoting global climate protection projects together again.

For 2022 we have therefore decided on the “CECIC Zhangbei Gaojialang Wind Farm Project” in China and “Landfill Gas Electricity Generation” in Turkey. We support the expansion of renewable energies in the Far East and the avoidance of climate-damaging landfill gas and the generation of renewable energies in Turkey for all of us.

As a result, we and you, too, improve the quality of life of the local people considerably and contribute to significantly reducing greenhouse gas emissions.

We hope to work in the new year 2023 with you to actively promote climate protection and effectively reduce greenhouse gas emissions through market-based instruments.

Your Advantag Team

Dear Madam or Sir,

Last week the European Parliament, the Council of Ministers represented by the Czech Council Presidency and the European Commission were able to agree on a compromise package for a new climate protection law. The emissions trading system of the European Union is intended to reduce the emissions of the European Union by 1,500 million tons of CO2 by 2030. According to Peter Liese, chief negotiator for the European Parliament and environmental policy spokesman for the largest group (EPP Christian Democrats), the EU ETS is intended to help ensure that the 2030 target of the EU can still be achieved.

According to Liese, the EU ETS only accounts for a small proportion of the electricity price, but a short-term reduction in the price of CO2 certificates is still a welcome contribution for those who suffer from high electricity prices.

Specifically, the institutions agreed to increase the reduction target for greenhouse gas emissions from 40% to 62%, to include waste incineration in the EU ETS from 2028, the CBAM CO2 border adjustment mechanism for steel, aluminium, fertilizers, cement, electricity and hydrogen to be introduced gradually (2026: 2.5% – 2027: 5% – 2028: 10% – 2029: 22.5% – 2030: 48.5% – 2031: 61% – 2032: 73.5% – 2033: 87, 5% – 2034 – 100%) and to significantly increase an innovation fund of currently 450 million certificates.

Similar to the German national emissions trading system, a new ETS is to be introduced in the EU for buildings and road traffic from 2027 on. At the same time, around 6 billion more are to be made available for the climate social fund to cushion social problems.

The price in the new ETS II should not be more than 45 euros per tonne of CO2, which is visibly lower than in Germany’s national emissions trading system, where the maximum amount should be 65 euros per tonne.

This year and next, the price in national emissions trading in Germany is 30 euros per tonne, and from 2024 this is expected to rise to 35 euros.

In the past trading week, the price of EU emission certificates moved between strong resistance and an equally strong support line due to technical resistance that could not be overcome.

The start of this trading week will be characterized by the fact that the swap from the December 2022 benchmark contract to December 2023 will take place and the last auction of a total of 2,568,500 EUAs will take place today at the Leipzig EEX.

The first fresh 2023 EU emission rights will not be offered again until January 9th, 2023, the first national emission rights in Germany on January 10th, 2023.

(Average Quotes Exchange / OTC)
Instrument	09/12/22	16/12/22	Change
EUA (Spot-Market)	87.88 EUR	83.80 EUR	-4.08 EUR
EUA (December-2022-Future)	87.97 EUR	83.82 EUR	-4.15 EUR
VCU (Voluntary Carbon Units ø)	4.05 USD	3.53 USD	-0.52 USD
VER (Gold Standard Spotmarkt ø)	2.91 USD	2.55 USD	-0.39 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	76.64 USD	79.18 USD	+2.54 USD
EURO (Currency, Forex)	1.0534 USD	1.0585 USD	+0.0051 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,

A lot is going on in European emissions trading at the moment. After the European Parliament, the Council and the Commission had already reached a historic agreement in the so-called trialogue to finally include shipping in the ETS, now the already started integration of aviation will be finally executed. Although aviation was already legally included in the ETS, this was rendered de facto ineffective by the allocation of free allowances. Now these free allocations are being phased out step by step. These are two extremely important sectors, because their inclusion in the ETS will achieve a greater degree of fairness, but above all it will create the incentive to invest in the best available technologies, as in the already integrated sectors, and thus to reduce environmental pollution on a large scale. The integration is to take place step by step in both sectors between 2024 and 2026.

And this week, the trilogue negotiations will continue, touching on a very sensitive point. The issue at stake is the “RePowerEU” programme, which is to be understood as a response to the energy crisis brought on by Putin’s aggression, as the European Commission explains on its website: “The new geopolitical realities and the energy market situation force us to drastically accelerate the transition to clean energy and make Europe less dependent on unreliable energy suppliers and volatile fossil fuels.” With this objective, the programme is thus congruent with the ETS, which also aims to achieve the transformation towards a carbon neutral society and industry.

However, it is the comparatively small funding gap of 20 billion euros that is sensitive and possibly even threatening for the emissions trading system. Under the impression of exploding energy prices, it seemed logical to some to kill two birds with one stone through the massive additional sale of emission certificates, namely first to finance the missing 20 billion and second to reduce the high energy costs. But with logic it is sometimes fatal, because if the basic thought is already problematic, then even the most logical line of thought leads to problematic results. An amusing example is the three people who eat something in a restaurant for 10 euros each and pay the waiter. The owner, however, sends the waiter back and asks him to return 5 euros as a small loyalty gift to the three guests. But since 5 a euros cannot be divided by 3 and the waiter had not received a tip either, he decided to keep 2 euros for himself and pay back 1 euro to each guest. So instead of paying 10 euros, each guest only paid 9 euros, making total of 27 euros. The waiter’s 2 euros take place on top of that, making 29 euros. The logic may look amazingly simple and clear, but the result is obviously wrong.

Since RePowerEU and the ETS pursue the same goals, it would be absolutely logical to use revenues from the ETS. However, it would be completely illogical to throw additional emission allowances on the market for this purpose. As a consequence, of course, the price of EUA would drop, reducing energy costs. It is estimated that CO2 accounts for perhaps 10 percent of the increased energy costs. So, it is not really effective. Moreover, it is not yet a foregone conclusion in what period of time what additional revenue can be generated if more allowances are sold but at a lower price. Moreover, it is anything but certain whether the massive oversupply will be permanently absorbed by the market. In the past, there have already been “normal” auctions that could not be closed due to lack of demand.

Moreover, it is absolutely not the task of the ETS to relieve industry of energy costs. That has to be done through other measures. The ETS, on the other hand, works as a cap-and-trade system, i.e. it is based on reducing the amount of allowances. And the “Fit for 55” programme is about, among other things, further sharpening this system in order to achieve the CO2 reduction targets and thus the 1.5-degree target. A glut of EUAs would undermine this and, moreover, make a nonsense of the Market Stability Reserve. In any case, it makes no sense to abandon the goals of the ETS even temporarily in order to finance the same goals in the RePowerEU programme. On the contrary, cheap EUAs also make coal and gas cheaper and would slow down efforts to phase out these energy sources. However, scientists have just vehemently pointed out once again at the World Climate Conference that even the efforts made so far to reach the 1.5-degree target are not enough. A delay or backtracking on the measures would be absolutely fatal. Therefore, if the ETS is to contribute to the financing of the RePowerEU programme, it should only be in line with the common goals, i.e. through higher prices and thus higher revenues in the ETS.

In the past trading week, the carbon market did not continue its massive upward trend with the same momentum, but held at a high level. On Thursday, the December contract reached a peak of 89.54 euros, but weakened on Friday and closed at just below 88 euros.

The new trading week is the last full auction week this year with a total of 9,397,000 EUA taking place at auction. This year’s auction calendar then ends on 19 December.

(Average Quotes Exchange / OTC)
Instrument	02/12/22	09/12/22	Change
EUA (Spot-Market)	87.58 EUR	87.88 EUR	+0.30 EUR
EUA (December-2022-Future)	87.67 EUR	87.97 EUR	+0.30 EUR
VCU (Voluntary Carbon Units ø)	5.33 USD	4.05 USD	-1.28 USD
VER (Gold Standard Spotmarkt ø)	2.97 USD	2.91 USD	-0.06 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	85.84 USD	76.64 USD	-9.20 USD
EURO (Currency, Forex)	1.0539 USD	1.0534 USD	-0.0005 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 German auctions within the framework of EU emissions trading system will also be held at EEX in the next three years with an option to extend by a further two years, as the energy exchange from Leipzig has published.

From 2010 onwards, more than 1.5 billion carbon emission allowances for Germany alone were auctioned at the EEX with total proceeds of more than 26 billion euros, almost all of which was used to finance German and international climate protection projects. In 2021 alone, EEX auctioned 587 million emission allowances for the EU member states.

Last Tuesday, the EU Parliament, the European Commission and the Presidency of the EU Council of Ministers, which is currently represented by the Czech Republic, were able to reach a preliminary agreement on the conditions for including maritime transport in European emissions trading system. Shipping is to be included in EU emissions trading from the year after next.

50% of the emissions from maritime journeys to and from European ports, including those from third countries, are now subject to carbon pricing from 2024. From January 2024 onwards, ship operators are obliged to purchase pollution permits for 40% of their emissions. From 2025 this share will increase to 70% and from 2026 carbon emission certificates will have to be purchased for all emissions.

While this deal was to be expected, the already bullish sentiment in the European carbon market was further boosted and emission allowances are up a strong 11% over the past week of trading, easily breaking through any technical resistances.

Should the chart technique play a role in the new trading week, a good support line can be found in the area around EUR 83.50 and stronger resistance in the region around EUR 93.30. The price is currently in between, but profit-taking could be a realistic scenario.

This week, a total of 12.5 million EUAs will be offered on all five trading days at EEX, in the coming week 9.4 million and the last auction this year will take place on December 19, 2022 in Leipzig, in which 2,568,500 EUAs will be offered.

The last two auctions for Germany’s national emission allowances will also take place this week on Tuesday and Thursday; If you still want to take part in these, you should act promptly and get in touch with our carbon trading desk.

(Average Quotes Exchange / OTC)
Instrument	25/11/22	02/12/22	Change
EUA (Spot-Market)	78.78 EUR	87.58 EUR	+8.80 EUR
EUA (December-2022-Future)	78.86 EUR	87.67 EUR	+8.81 EUR
VCU (Voluntary Carbon Units ø)	5.43 USD	5.33 USD	-0.10 USD
VER (Gold Standard Spotmarkt ø)	3.15 USD	2.97 USD	-0.18 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	83.81 USD	85.84 USD	+2.03 USD
EURO (Currency, Forex)	1.0395 USD	1.0539 USD	+0.0144 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