Dear Sir or Madam,
On Wednesday, the European Commission proposed revising the European Union Emissions Trading System (EU ETS) to curb rising CO2 and energy prices. As part of this, the Market Stability Reserve (MSR) for European emissions trading, which has been in place since 2019, will be adjusted.
The Commission intends to prevent surplus emission allowances from being automatically cancelled in future, in order to better offset price fluctuations. Until now, allowances exceeding a value of 400 million must be removed from the market by reducing auction volumes. In future, these emission allowances are instead to be retained as a reserve to support market stability and, if necessary, increase auction volumes, thereby sending a bearish price signal.
According to the European Commission, greenhouse gas emissions have fallen by 39 per cent since 1990, whilst the economy has nonetheless grown by 71 per cent. Due to higher energy prices caused by the war in Iran, the Commission and Member States are working on relaxing emissions trading to reduce costs for industry. The planned changes to the ETS are intended to allow the EU to respond more flexibly to market changes; following consultation with Member States, concrete reform proposals will now be available in July.
Whether the Middle East conflict will have been defused by then and to what extent energy prices will continue to be affected by it remains uncertain, however.
On Friday, the benchmark December 2026 contract for Brent crude oil closed at US$79.02, down US$5.41 on a weekly basis, the spot market, however, was once again close to the high of 30 March, which stood at US$112.85, and ended last week at US$108.84.
As the Easter holidays almost traditionally lead to higher prices at the pumps, average prices for a litre of diesel rose to nearly €2.50 over the Easter break in Germany.
German Top Economist Veronika Grimm has therefore raised the issue of speed limits on German autobahns. As public discourse has become increasingly difficult in recent years, this has naturally led to criticism that people should be able to decide for themselves how fast they want to drive on the motorway, even at 100 km/h, in order to save fuel.
But ultimately, this misses the point. It is not about taking away the freedom of drivers of fossil-fuel-powered vehicles to drive at 100 km/h, but about reducing overall consumption of diesel and petrol in order to ensure security of supply and thereby bring prices down. After all, there are still plenty of drivers of fossil-fuel-powered vehicles who are travelling at significantly higher speeds.
Countries such as China have already decided to halt exports of diesel and petrol, and Russia also no longer wishes to export oil. Combined with the blockade of the Strait of Hormuz, a worsening of the supply situation is becoming increasingly likely for Central Europe as well, and all measures should therefore be taken to avoid a shortage, as this would place a heavy burden on the economy and private households.
The remaining leadership in Iran has recognised its leverage regarding the blockade of the Strait of Hormuz, which is why the EU must significantly step up its efforts to achieve independence from fossil fuels, a goal towards which revenue from emissions trading could be directed.
Prices in the EU ETS remained virtually unchanged last week compared to the previous week. EUAs closed with a small gain of two cents at 71.69 euros in the benchmark contract.
Due to the scheduled absence of the Polish auction and because of Easter Monday, only three auctions will take place on the EEX this week, with a total of 6,518,000 EUAs being put up for auction.
| Instrument | 27/03/26 | 02/04/26 | Change |
| EUA (December-26-Future) | 71.67 EUR | 71.69 EUR | +0.02 EUR |
| EUA2 (December-28-Future) | 66.66 EUR | 66.84 EUR | +0.18 EUR |
| nEZ25 (national Emission Allowances (D)) | 55.00 EUR | 55.00 EUR | +0.00 EUR |
| UKA (December-26-Future (UK)) | 37.05 GBP | 41.50 GBP | +4.45 GBP |
| UK Natural Gas (December-26-Future) | 142.61 GBP | 129.71 GBP | -12.90 GBP |
| ICE Brent Crude Oil (December-26-Future) | 84.43 USD | 79.02 USD | -5.41 USD |
| EURO (Forex) | 1.1508 USD | 1.1519 USD | -0.0011 USD |
(EUA, EUA2, UKA, Natural Gas, Crude Oil and Euro Currency shows day-end-exchange quotes of the benchmark contract. This market information has just an informational character and are no advice or offer to trade emission allowances or their futures and options. If you want to unsubscribe, please reply to this mail.)
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With kind regards,
Your Advantag – Team