Emissions Trading / Carbon Market News (27/02/2023)

Dear Madam or Sir,

Last year, the Federal Republic of Germany auctioned a total of 217 million national emission allowances in accordance with the German Fuel Emissions Trading Act (BEHG) at the Leipzig EEX and thus generated income of around 6.4 billion euros.

The aim of the BEHG is to reduce greenhouse gas emissions in the transport and building sectors, since no reduction in emissions has been recorded here in recent years. It remains to be seen whether this will lead to measurable success in the area of transport and traffic, a speed limit on German autobahns would certainly be easier to implement.

According to the ideas of the EU Parliament, around 45% of the buildings in the building sector should be renovated by 2033. A real estate industry association has calculated that this would mean up to 182 billion euros per year for Germany alone. According to the association, this is illusory, as is the 30% of building renovations proposed by the EU Commission.

From our point of view, the state is called upon to set up new subsidy programs, especially for buildings in administration, in the education and health sector as well as for industry and trade. Because the renovation of an average university hospital alone would be equivalent to the renovation of an entire small town and could be monitored much more easily.

In the European emissions trading EU ETS, the current EUA benchmark contract December 2023 broke through the mark of 100 euros as a benchmark for the first time last Tuesday and was also able to break through into the three-digit range on Wednesday and Friday. On Tuesday, the EUAs also closed above the 100 mark. On Friday, an attempt to stay above the psychological 100 level failed and carbon certificates ended last week’s trading week at 97.39, still up more than 1% on the weekly basis.

It remains to be seen whether the EUAs can continue to follow the previous sideways-up trend, or whether this support line will be broken down for speculative profit-taking. This might be a good time to make compliance purchases for plant operators. In recent years, it has often been the case that prices have tended to be rather bullish until the end of the compliance deadline.

  (Average Quotes Exchange / OTC)   
Instrument17/02/2324/02/23Change
EUA (Spot-Market)95.02 EUR96.36 EUR+1.34 EUR
EUA (December-2023-Future)96.25 EUR97.39 EUR+1.14 EUR
VCU (Voluntary Carbon Units ø)3.28 USD4.00 USD+0.72 USD
VER (Gold Standard Spotmarkt ø)2.17 USD2.47 USD+0.30 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)83.00 USD83.29 USD+0.29 USD
EURO (Currency, Forex)1.0694 USD1.0545 USD-0.0149 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

Emissions Trading / Carbon Market News (20/02/2023)

Dear Madam or Sir,

Last Tuesday, as part of the “Fit for 55” climate package, the European Parliament decided to end the combustion engine in 2035, despite resistance from the conservative camp. An important reason for this is the goal of reducing CO2 in road traffic by 55% for cars and delivery vans by 50% by 2030. Most manufacturers in Europe have already announced in the past few months that they will no longer produce cars with combustion engines by that time at the latest to produce.

However, it is still unclear whether combustion engines with e-fuels will also be recognized as climate-friendly in the future. From our point of view, this will not make any sense from a purely commercial and physical point of view, since the energy required for production only achieves a fifth of the range of electric cars.

At the same time, however, one must let the charging infrastructure growing much faster, because there are already not enough fast charging stations at peak times, especially on the motorways.

EU allowance prices have gained 3.5% over the past week and peaked at EUR 98.45 (EUA December 2023 futures) on Friday, which was also a new six-month high.

The relatively mild temperatures in large parts of Europe could have a negative impact on price developments in the coming week. On the other hand, it could appear bullish that only 9,166,500 EUAs will be auctioned this week, 2,676,000 fewer than last week. In addition, more purchases will be made in the coming weeks to meet the obligation to surrender, which speculators could also use to bring prices above the 100 Euro mark.

  (Average Quotes Exchange / OTC)   
Instrument10/02/2317/02/23Change
EUA (Spot-Market)91.76 EUR95.02 EUR+3.26 EUR
EUA (December-2023-Future)93.03 EUR96.25 EUR+3.22 EUR
VCU (Voluntary Carbon Units ø)4.05 USD3.28 USD-0.77 USD
VER (Gold Standard Spotmarkt ø)2.37 USD2.17 USD-0.20 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)83.90 USD83.00 USD-0.90 USD
EURO (Currency, Forex)1.0677 USD1.0694 USD-0.0017 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

Emissions Trading / Carbon Market News (13/02/2023)

Dear Madam or Sir,

As expected, both the EU parliamentary committee and the EU member states have passed the reform of the EU emissions trading system (EU ETS), which is why even more sectors and companies will be subject to the pricing of greenhouse gas emissions in the coming years.

Peter Liese, the responsible rapporteur in the Parliament of the European Union, speaks of a great success, as he announced on Twitter. Now the shipping, road transport and heating sectors are becoming a reality as part of the “Fit for 55” package. The goal here is to surpass the goal of reducing carbon emissions in the priced sectors by half until 2030.

Naturally, the latest steps don’t go far enough for environmental organizations, too far for some branches of industry and economists welcome the expansion of trade to other sectors.

And that’s not to be underestimated in the reform either – the revenue should also reduce the social consequences for low-income households by 65 to 86 billion euros in favour of the climate social fund.

This had no impact on the development of the price of EU emission allowances, as this has already been priced in by the market. The EUAs tended to move sideways and only lost slightly on a weekly closing price basis after the high price gains of the previous weeks.

Insofar as trading continues to be mainly technical this week, the price could move in the rough range between 91 and 98 euros, with the tendency being more sideways-upwards.

During this trading week, a total of 11,842,500 EUAs will be offered for auction on all five trading days at the Leipzig Energy Exchange EEX. Certificates from national emissions trading are also available this week on Tuesdays and Thursdays.

  (Average Quotes Exchange / OTC)   
Instrument03/02/2310/02/23Change
EUA (Spot-Market)91.87 EUR91.76 EUR-0.11 EUR
EUA (December-2023-Future)93.29 EUR93.03 EUR-0.26 EUR
VCU (Voluntary Carbon Units ø)2.60 USD4.05 USD+1.45 USD
VER (Gold Standard Spotmarkt ø)2.54 USD2.37 USD-0.17 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)79.75 USD83.90 USD+4.15 USD
EURO (Currency, Forex)1.0795 USD1.0677 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

Emissions Trading / Carbon Market News (06/02/2023)

Dear Madam or Sir,

Before the Federal Environment Agency (UBA) is due to publish the official estimate of emissions for 2022 in accordance with the Climate Protection Act next March, it was able to draw a statistical line under 2021 last week. The figures could be of great importance in the future, as it represents the last status before the turning point – provoked by Russia’s invasion of Ukraine.

It was expected that emissions would increase compared to 2020, as the pandemic-related restrictions no longer played a role. In fact, CO2-equivalent emissions in Germany rose by around 29.6 million tonnes, or 4%. The strongest increase was in energy supply, as there was already a trend towards increased coal-fired power generation in the second half of 2021. Emissions also increased in the industrial and traffic sectors compared to the previous year. Emissions from households and agriculture, on the other hand, decreased. In total, 759.1 million tonnes of CO2 equivalents were emitted in Germany in 2021, 39% less than in the reference year 1990. In this respect, therefore, the European emission reduction targets were fully met by Germany.

In the short period since the beginning of the new year, the price of European pollution rights has staged an astonishing rally, rising by around 20 euros and taking us very close to the 100-euro mark again. After the December contract reached a high of EUR 97.55 on Wednesday, a sideways – downward movement followed for the rest of the week in technically driven trading.

  (Average Quotes Exchange / OTC)   
Instrument27/01/2303/02/23Change
EUA (Spot-Market)87.76 EUR91.87 EUR+4.11 EUR
EUA (December-2023-Future)89.23 EUR93.29 EUR+4.06 EUR
VCU (Voluntary Carbon Units ø)2.39 USD2.60 USD+0.21 USD
VER (Gold Standard Spotmarkt ø)2.53 USD2.54 USD+0.01 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)86.33 USD79.75 USD-6.58 USD
EURO (Currency, Forex)1.0868 USD1.0795 USD-0.0073 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