Month: June 2023

Dear Madam or Sir,

Professor Ottmar Edenhofer, Director of the Potsdam Institute for Climate Impact Research (PIK) and also Director of the Mercator Research Institute on Global Commons and Climate Change (MCC), told the magazine “Spiegel” that prices for emissions in the transport and building sectors would have to be drastically increased in order to achieve the important climate protection sector targets.

The current price for a carbon emission allowance in national German emissions trading system is EUR 30.00 per ton this year and will rise to EUR 45.00 in 2024. The Berlin MCC has now determined that the control effect of CO2 pricing requires significantly higher prices in order to reduce the consumption of fossil fuels in the transport and building sector.

The MCC economists have now calculated a price of EUR 275.00 per ton of CO2 in 2030 and a further increase to EUR 340.00 by 2035 to make climate-damaging energy sources obsolete. For an average household in Germany, these would be additional costs of around EUR 13,400 by 2045, and even EUR 23,100 for a single-family home with oil heating.

In addition, Edenhofer recommends using part of the income as aid linked to the CO2 emissions per square meter or the type of heating. Households with gas boilers could get back a total of 6,360 euros from emissions trading by 2045, with oil heating it would be 9,540 euros.

The new auction calendar with the adjusted auction volumes for the rest of the year was published at EEX last week. The European Commission uses the additional volume to finance measures within the framework of REPowerEU.

In July, the usual auction volumes at EU auctions will rise from 2,409,000 EUAs per auction to 2,658,000. During the August summer break, the EU will then auction 1,329,000 EUAs.

In the period from September to December, 3,035,000 EUAs will then be offered in the regular EU auctions, 2,147,000 for Germany (currently 1,939,500 weekly) and 3,347,500 EUA every two weeks for Poland (previously 2,676,000).

The price of the EUAs took this as an opportunity to correct after the significant increases of the two previous weeks and fell 4.8% on a weekly closing basis after the price had previously risen to EUR 96.00 (EUA Dec-2023) last Tuesday.

In the last week of June, a total of 9,167,500 EUAs will be auctioned on the EEX due to the two-week auction of Polish certificates, before a total of 12,589,500 EUAs will be offered in the coming week due to the new auction calendar and the Polish auction.

(Average Quotes Exchange / OTC)
Instrument	16/06/23	23/06/23	Change
EUA (Spot-Market)	91.21 EUR	86.81 EUR	-4.40 EUR
EUA (December-2023-Future)	92.35 EUR	87.88 EUR	-4.47 EUR
VER (Natural Carbon Offsets)	1.52 USD	1.64 USD	+0.12 USD
VER (CORSIA eligible Carbon Offsets)	1.11 USD	1.04 USD	-0.07 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	76.42 USD	74.21 USD	-2.21 USD
EURO (Currency, Forex)	1.0941 USD	1.0893 USD	-0.0048 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 causing longer and longer periods of drought, even in countries that just a few decades ago were not struggling with it nearly as frequently and intensively. Especially in areas with shallow-rooted conifers, it is easy for forest fires to spread during dry periods.

In the Brandenburg town of Jueterbog, south of Berlin, Germany, a forest fire that lasted for days burned down an area of 733 hectares, and the fire brigade also had to be deployed several times on the Lower Rhine due to the persistent drought.

However, the more than 400 forest fires in Canada are currently particularly devastating. A sad record, since summer has only just begun. So far, the Canadian wildfires have destroyed nine million hectares of forest, releasing vast amounts of CO2 that have been stored in their wood. Canada’s forests collectively store more than 200 billion tons of CO2, which is about 11% of the world’s total.

Anyone who has seen the images from New York City, in which the city is enveloped in a gigantic cloud of orange smoke, might be reminded of apocalyptic science fiction films. The health consequences for Americans in smoke-pervaded areas range from lung disease to heart attacks and strokes.

The climate conference held in Bonn last week, which was held in preparation for the world climate conference beginning in Dubai at the end of November, was of little help in the fight against global warming. It can also be doubted that the leadership of an oil state would result in solutions that would promptly lead to a sharp reduction in the consumption of fossil fuels such as oil and gas.

The prices for EU emission allowances rose significantly last week for the second time in a row based on the weekly closing price and have remained stable above the EUR 90 mark. If the market continues to be bullish this week, the next strong technical resistance would be in the  EUR 99 area. However, in case of any profit taking, the EUR 90 level could be broken back down, although there are some support lines just below the EUR 91 level.

(Average Quotes Exchange / OTC)
Instrument	09/06/23	16/06/23	Change
EUA (Spot-Market)	85.50 EUR	91.21 EUR	+5.71 EUR
EUA (December-2023-Future)	86.79 EUR	92.35 EUR	+5.56 EUR
VER (Natural Carbon Offsets)	1.52 USD	1.52 USD	+0.00 USD
VER (CORSIA eligible Carbon Offsets)	0.82 USD	1.11 USD	+0.29 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	74.92 USD	76.42 USD	+1.50 USD
EURO (Currency, Forex)	1.0748 USD	1.0941 USD	+0.0193 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 Greens had climate money anchored in the coalition agreement of the current German government, and the coalition committee of March last year decided to develop the possibility of payment via the personal tax ID. But even Greens boss Robert Habeck no longer expects that the climate money will flow in this legislative period, which is intended to relieve low-income households in particular.

The Liberals, which are also in the German government, has strengthened its position in recent weeks to pursue climate protection solely with the well-functioning CO2 emissions trading system, which has successfully proven its control effect. There should also be no upper price limits in the transport and building sector, as is currently the case in national emissions trading, which will be EUR 65 in 2026.

In an analysis, the MCC (Mercator Research Institute on Global Commons and Climate Change) came to the conclusion that the prices for CO2 emissions, or their greenhouse gas equivalents would be in the range of 200 to 300 euros per ton of CO2e at the end of the decade.

In the foreseeable future, politicians should therefore succeed in finding ways to mitigate social hardship and at the same time improve the broad understanding of climate protection.

After the prices for EU emission allowances fell significantly in the previous two weeks, they rose again visibly in the last week of trading. Based on the weekly closing price, the EUAs increased by almost 10%, although with 11.8 million EUAs that were auctioned on the EEX, almost twice as many certificates flowed into the market as in the previous week.

In the new trading week, there will be no Polish auction on Wednesday, which is why a total of 9,166,500 certificates will be auctioned on the other four trading days.

(Average Quotes Exchange / OTC)
Instrument	02/06/23	09/06/23	Change
EUA (Spot-Market)	77.75 EUR	85.50 EUR	+7.75 EUR
EUA (December-2023-Future)	78.99 EUR	86.79 EUR	+7.80 EUR
VER (Natural Carbon Offsets)	1.11 USD	1.52 USD	+0.41 USD
VER (CORSIA eligible Carbon Offsets)	0.77 USD	0.82 USD	+0.05 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	77.78 USD	74.92 USD	-2.86 USD
EURO (Currency, Forex)	1.0728 USD	1.0748 USD	+0.0020 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,

On Thursday, a majority of MEPs voted in favour of strengthening a set of rules that will oblige EU-based companies to consider human rights and environmental standards within their value chains.

The provisions in the future EU Supply Chain Act stipulate that European companies as well as third-country companies operating in the EU with 250 or more employees and more than €40 million in global turnover must prevent, end or mitigate the negative impacts of their operations on human rights and the environment, such as child labour, slavery, pollution or biodiversity loss. They must also assess the human rights and environmental impacts of their value chain partners, including supply, transport, distribution and sales.

This would then also force these companies to fully disclose their carbon footprint as well as take measures to reduce it as part of corporate sustainability requirements. Companies not obeying the rules would be held liable and could be fined at least 5% of their global turnover. Now that the Parliament has adopted this position, negotiations with Member States on the final form of the Directive can begin. In the so-called trilogue, the EU Commission, Council and Parliament must agree on a common regulation. Germany will then probably have to sharpen its Supply Chain Act (LkSG), which is in force from January 2023.

This is certainly another important step on the way to a lower-carbon economy. So far, Europe has not acted fast enough. This is the conclusion analysts from Bloomberg take place in a current update. They summed up that although energy-related emissions in Europe are already declining, the pace of emissions reduction must be doubled. Europe would need to mobilise over $32 trillion in investment to achieve a net-zero energy economy by 2050. Efforts should focus on a step-by-step introduction of clean energy, not only in industrial production, but in particular in road transport and building heating, as well as an increasing use of net-zero fuels in key sectors.

In addition to effective legislation, the importance of emissions trading and high carbon prices repeatedly comes into focus in order to quickly take place towards the goal of a net-zero economy.

In the past trading week, however, EUAs initially continued their downward trend, even reaching a new four-month low – before recovering on Friday morning after the auction on the EEX was again executed at a premium to the spot market.

For the whole month of May, EUA lost 7.2 per cent. As data from the London exchange ICE show, financial funds had bet more heavily than ever on falling prices in the weak macroeconomic environment, thus – in addition to low gas prices and mild temperatures – causing significant damage to the market. Nevertheless, an even more extreme crash didn’t take place. The low of the benchmark contract at EUR 78.45 was still clearly above the bottom that was to be expected from a chart perspective at around EUR 77.45. At every price point in the downward trend, there were plenty of buy bids, which shows that parallel to the large short positions, there was also a pronounced interest in taking advantage of the low prices to buy – which also remains a clear recommendation for the coming days.

(Average Quotes Exchange / OTC)
Instrument	26/05/23	02/06/23	Change
EUA (Spot-Market)	81.05 EUR	77.75 EUR	-3.30 EUR
EUA (December-2023-Future)	82.30 EUR	78.99 EUR	-3.31 EUR
VER (Natural Carbon Offsets)	1.28 USD	1.11 USD	-0.17 USD
VER (CORSIA eligible Carbon Offsets)	0.93 USD	0.77 USD	-0.16 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	77.05 USD	77.78 USD	+0.73 USD
EURO (Currency, Forex)	1.0727 USD	1.0728 USD	+0.0001 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