Author: advantag

Dear Sir or Madam,

While the European Commission expects the price of emission allowances in the EU ETS II to be €45 when it starts in 2027 and €60 in 2030, an analysis by the EWI (Energy Economics Institute at the University of Cologne) sees the need for a more ambitious price path for the new European emissions trading system.

The analysis by the team led by project manager Philipp Artur Kienscherf sees prices of more than €160 per tonne of CO₂ as possible, which is significantly above the European Commission’s price expectations.

The analysis also shows that a carbon price of less than €250 in 2030 will not be sufficient to achieve the decarbonisation targets for the building and transport sectors. At the same time, the analysts pointed out that accompanying measures, such as subsidy programmes and social compensation, would be helpful in achieving the goals of the Fit-for-55 programme.

With the market stability reserve, the EU has already created an instrument in EU ETS I that will also be used in EU ETS II. The legislator intends to use this to keep prices low in 2027. In the first year, certificates will be auctioned through frontloading at a volume of 130% of the auctioned volume. The additional 30% will then be auctioned to a lesser extent in the years 2029 to 2031.

In addition, 20 million additional allowances are to be auctioned if the price exceeds 45 euros in two consecutive months, 50 million if the price is twice the six-month average of the previous months in three consecutive months, and 150 million if the average price exceeds three times the previous six-month average in more than three consecutive months. However, such market intervention can only be used once within a 12-month period.

These regulations alone will lead to higher volatility, especially at the beginning, as intervention by the market stability reserve would only be possible in the third month after the start of trading under EU ETS II at the earliest. And if you look at the total certificate cap for 2027 of 1,036,288,784 emission allowances, an additional 20,000,000 are unlikely to have any long-term effect.

During the shortened Holy Week, prices recovered slightly in both the energy sector and EU emission allowances as the White House signalled a relaxation of US tariff policy.

This was probably triggered by Beijing’s show of strength in announcing an export ban on rare earths, which are essential to the computer industry and electromobility, both important sectors in the US.

Prices on the financial, commodity futures and energy markets will therefore continue to be influenced by global economic developments in the current week.

During the four days of this trading week, there will be three auctions on the EEX, at which 8,098,000 EUAs will be auctioned. In the following week, there will also be only three auction dates, as Thursday, 1 May, is a public holiday and the German auction will also be cancelled on Friday, as many people will be taking a long weekend.

(EUA. 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.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Your Advantag – Team

Dear Sir or Madam,

France has called the European Union for a price corridor for CO2 emissions trading in order to limit volatility driven by speculation while still being in line with the EU’s greenhouse gas reduction targets.

The French Minister for Ecology, Energy, Sustainable Development and the Sea, Agnès Pannier-Runacher, explained that companies should be given long-term price signals so that they can adapt and plan ahead.

On the other hand, the Berlin think tank Agora Energiewende is calling for a minimum price in the EU ETS II. In its recently published policy brief “Course to Goal Achievement”, Agora recommends a minimum price of 90 euros when the EU ETS II is introduced in 2027. The target price set by the EU is between 48 and 80 euros.

In addition, Agora repeatedly proposes paying a climate allowance of 120 euros per person from 2026, which should then be scaled according to income in subsequent years. At present, this would correspond to about half of the revenue from national emissions trading system in Germany.

So far, however, there has been no information regarding the climate allowance in the current German coalition negotiations between the CDU/CSU and SPD.

Under pressure from further falling gas prices, the price of EU ETS emission allowances fell back below the 70 euro mark last week and ended the week down 3.7% on Friday.

Last Thursday, EUAs broke through the 200-day-line and moved towards the strong support level described in the last market report at just over 68 euros. On Friday, this technical support also held and the price recovered slightly to a closing price of 68.80 in the benchmark contract.

This week, auctions will be held on all five trading days on the EEX, with a total of 13,417,000 EUAs being auctioned.

(EUA. 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.)

Please call our international carbon desk if any further questions exist: +49.2831.1348220.

With kind regards,

Your Advantag – Team

Dear Sir or Madam,

In recent weeks, the topic of price developments for fossil fuels following the introduction of EU ETS II in 2027 has been repeatedly taken up by the press. Since journalists tend to copy each other, most reports had the aim of scaremongering about exorbitantly rising petrol and diesel prices.

By and large, most media outlets wrote about price increases of 38 to 40 cents for a litre of petrol, diesel or heating oil from 2027, and a price of 200 to 300 euros per tonne of CO2 was expected for CO2 emission certificates.

Now, a few days ago, Prof. Dr. Alexander Eisenkopf from the Zeppelin University in Friedrichshafen has brought a completely different possibility into play. In the coming year, the fixed price phase in Germany’s national emissions trading will end and prices will move in a corridor of 55 to 65 euros.

Since the European Union has also built a market stability reserve into the EU ETS II for reasons of social compatibility and is aiming for a target price of 45 euros per tonne, at least at the beginning in 2027, Professor Eisenkopf sees a high probability that fuel prices in Germany could even fall slightly as a result of the falling prices for CO2.

Our scenario for the introduction of the EU ETS II initially predicts a high probability of very volatile prices until supply and demand settle into a realistic price corridor. In the long term, we also expect prices to rise, but a sharp increase to up to €300 per tonne is rather unlikely.

However, since the distributors of fossil heating and combustion fuels need a correspondingly profitable margin calculation, there is also the possibility that a higher price could be charged at petrol stations in the first few weeks until competitive prices prevail.

Based on our many years of experience in fundamental market analysis and chart analysis in other energy and commodity markets, particularly in the EU ETS I, we will be happy to assist you.

Last week, prices for emission rights in the EU ETS I continued to move up in an upward channel that began two weeks ago, supported by the market environment, and closed with a slight gain of 0.65% on a weekly basis despite profit-taking by institutional investors.

The EUA benchmark contract for December 2025 moved in a range of €69.59 to €74.23, but was stopped by a resistance line, which is currently slightly above the €74 mark. Should the market environment remain bullish, this barrier could be broken and the way towards €80 would be clear. If the resistance holds, the EUA could also fall back below the 70-euro mark.

This week, the Polish Wednesday auction is off again, which is why only 11,343,500 EUAs will be auctioned on the other four days, compared to 13,416,000 last week.

(EUA. UKA, Natural Gas, 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 emission allowances 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,

Your Advantag – Team