Author: advantag

Dear Madam or Sir,

One hears again and again that Germany and the EU are the only countries fighting for more global climate protection, followed by the argument that this is anti-business and that we alone cannot save the world. So today we bring a positive example from one of the most important oil-producing countries in the world.

The Abu Dhabi National Oil Company (ADNOC) is investing US$15 billion in carbon reduction projects by the end of this decade to reduce its own operational emissions and meet its own decarbonization goals.

In particular, carbon capture and storage (CCS) projects, new, cleaner energy solutions (hydrogen and renewable energies), further electrification of the company, measures to prevent routine gas flaring and the establishment of international partnerships for climate protection.

The United Arab Emirates (UAE) is committing a total of US$165 billion to the clean energy transition. They are the first Persian Gulf state to aim for net-zero emissions by 2050, a remarkable achievement for an oil state.

In addition, the AirCarbon Exchange (ACX) has partnered with the Abu Dhabi Global Market (ADGM) to create the world’s first carbon-neutral international financial hub and regulated trading venue for carbon credits. Among others, the Leipzig EEX is involved in the ACX. Advantag is also a commodity exchange member on the ACX, where tokenized trading for carbon emission certificates for international aviation (CORSIA) takes place.

On the market for EU emission allowances, EUAs continued to recover last week and gained 6.5% on a weekly closing basis. The main drivers were the cold temperatures in Central Europe, rising gas and oil prices and the breach of a technical resistance on Wednesday. It will be interesting to see if the EUAs will move further towards EUR 90 this week or if there will be some profit taking by speculative market participants.

This week sees the first auction of emissions allowances for the aviation industry this year; on Wednesday 775,500 EUAA are offered. On the other trading days of the week, a total of 9,166,500 EUAs are auctioned.

(Average Quotes Exchange / OTC)
Instrument	13/01/23	20/01/23	Change
EUA (Spot-Market)	78.09 EUR	83.39 EUR	+5.30 EUR
EUA (December-2023-Future)	79.86 EUR	85.08 EUR	+5.22 EUR
VCU (Voluntary Carbon Units ø)	2.80 USD	2.91 USD	+0.11 USD
VER (Gold Standard Spotmarkt ø)	2.89 USD	2.79 USD	-0.10 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	85.44 USD	87.71 USD	+2.27 USD
EURO (Currency, Forex)	1.0831 USD	1.0855 USD	+0.0024 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,

One of the world’s most renowned scientists in the field of research into global climate change is Professor Dr Hans Joachim Schnellnhuber. He is a physicist, member of the Intergovernmental Panel on Climate Change (IPCC) and founder of the Potsdam Institute for Climate Impact Research (PIK). In an interview with the German ARD TV-magazine Panorama, he discussed his ideas about justice in climate protection.

The scientist suggests that each person gets a budget of three tons of CO2 per year. If one need more, he must pay for them with carbon emission allowances. This annual budget results from the simple calculation that every citizen on earth can only emit three tons of CO2 or its equivalent in other greenhouse gases (CO2e) per year in order to continue to make the 2°C goal still possible.

With this, the people who emit less greenhouse gases could generate income and the wealthy and rich would be asked to pay, whose emissions according to the Paris “World Inequality Lab” emit around 100 tons a year, multi-billionaires sometimes up to 2,000 tons a year. The average German causes greenhouse gas emissions of around 10 tons per year.

Incomprehensibly, the Green German climate protection minister Habeck has positioned himself clearly against such private emissions trading, although it is already foreseeable that Germany will miss its climate protection goals significantly in this decade.

Last week, the European carbon emission allowances showed a plus of 3.2% on a weekly closing basis with a trading range in the December 2023 benchmark contract between 77.01 and 82.58 euros. The first auctions this year of a total of 9.2 million emission allowances showed good demand and thus supported the course as well as the prospects of cooler weather in Central Europe.

In the new trading week, a total of 11,842,500 will be auctioned on all five trading days at the Leipzig European Energy Exchange EEX.

If the EUAs do not break through the support line currently at 77.60 (benchmark) on a closing price basis, the price could range between EUR 77.60 and almost EUR 85.00 this week, as long as there are no important price-moving news.

(Average Quotes Exchange / OTC)
Instrument	06/01/23	13/01/23	Change
EUA (Spot-Market)	75.86 EUR	78.09 EUR	+2.23 EUR
EUA (December-2023-Future)	77.39 EUR	79.86 EUR	+2.47 EUR
VCU (Voluntary Carbon Units ø)	3.50 USD	2.80 USD	-0.70 USD
VER (Gold Standard Spotmarkt ø)	2.98 USD	2.89 USD	-0.09 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	78.51 USD	85.44 USD	+6.93 USD
EURO (Currency, Forex)	1.0644 USD	1.0831 USD	+0.0187 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,

In its annual review, the German Federal Environment Agency (UBA) took a positive stock of the Emissions Trading Scheme (ETS) in such a special year as 2022. One can be reasonably astonished about this, considering that after the start of the Russian invasion of Ukraine, the carbon price crashed towards the 50-euro mark and strong interventions up to the suspension of the ETS were required by certain circles. As the BMU summed up, German auction revenues from European emissions trading alone amounted to more than 6.8 billion euros last year, a significant plus compared to the 5.3 billion euros in 2021.

At around 6.4 billion euros, sales proceeds from the national emissions trading system (nEHS) for heat and transport were down on the previous year (7.2 billion euros in 2021). According to the BMU, this was unfortunately not due to falling emissions in the transport and buildings sectors, but rather to the legislature’s decision to postpone the price increase to 35 euros, originally planned for 2023, by one year. This means that certificates will cost a uniform 30 euros in 2022 and 2023. Some companies have therefore postponed the purchase of their certificates until 2023. The 2022 emissions can also be settled with 2023 certificates. Cumulatively, however, the total revenue of both systems, at more than 13 billion euros, was still slightly above the 2021 result.

Dirk Messner, President of UBA, emphasised in the report that carbon pricing through emissions trading is a decisive lever for achieving the climate goals, as it provides a significant impetus for the climate-friendly transformation of our society. The revenues from the EU-ETS and the nEHS flow entirely into the Climate and Transformation Fund (KTF). This special fund is currently used to support programmes such as federal financial support in the building sector, the further development of electromobility including the expansion of the charging infrastructure, the development of the hydrogen industry or the promotion of energy efficiency. The abolition of the EEG levy is also financed from the KTF, which has contributed to a reduction in electricity costs in the past year.

The report also makes clear that in 2022, at around 85 million, much less emission allowances were auctioned for Germany at the European Energy Exchange (EEX) in Leipzig than in the previous year (2021: 101 million). At the same time, however, the price of emission allowances rose significantly: On average, EUAs were significantly higher than the previous year at 80.32 euros (2021: 52.50 euros). Compared to 2020 (24.61 euros), the average revenue has even more than tripled. On 19 August 2022, the highest price at a German auction since the introduction of the ETS was achieved at 96.87 euros.

Jürgen Landgrebe, head of the department “Climate Protection, Energy, German Emissions Trading Authority” at the Federal Environment Agency also drew a positive conclusion: “The strong price increases are largely due to the European reform process intensified last year to raise the ambition level in the EU ETS for the period until 2030. Market participants recognise that the political framework conditions are being geared towards more climate protection. This creates the necessary economic incentives for investments in climate-friendly technologies and production methods. The price development of the past year can thus also be seen as a vote of confidence by market players in the ability of European climate policy to be reformed”.

The new year started with exceptionally high temperatures. In addition, efforts to move away from Russian energy sources have been successful and gas storage facilities are largely well filled. This had a significant impact on the energy markets. The European gas price, for example, continued its correction in the first trading days of the new year. On Wednesday, the TTF futures contract for Dutch natural gas traded at around 67 euros per megawatt hour for some time. This is the lowest quotation since February 2022, before the start of the war in Ukraine. The carbon price was unable to avoid the pull of the indices and broke through important support lines on its downward slide. The December benchmark contract fell by around 8 per cent on a weekly basis.

Auctions on the EEX start today, Monday. As the carbon price consolidated at a low level in thin trading on Friday, it will be interesting to see how the auctions are absorbed after the winter break.

(Average Quotes Exchange / OTC)
Instrument	30/12/22	06/01/23	Change
EUA (Spot-Market)	83.51 EUR	75,86 EUR	-7,65 EUR
EUA (December-2023-Future)	83.97 EUR	77,39 EUR	-6,58 EUR
VCU (Voluntary Carbon Units ø)	4.60 USD	3,50 USD	-1,10 USD
VER (Gold Standard Spotmarkt ø)	3.84 USD	2,98 USD	-0,86 USD
nEZ (German National Carbon Units)	30.00 EUR	30,00 EUR	+0,00 EUR
ICE Brent Crude Oil (Benchmark Future)	83.02 USD	78,51 USD	-4,51 USD
EURO (Currency, Forex)	1.0701 USD	1,0644 USD	+0,0057 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,

We hope you had a great start to the new year.

The  New Year’s Eve 2022 has set a temperature record in Germany; with up to 21°C it was warmer than ever on this date since weather recording began. Unfortunately, this record, like last year’s extreme summer temperatures, will not remain uncommon.

It is up to all of us, especially those in the industrialized world, to take action to help slow down climate change so that humanity still has a chance to adapt. And that starts with every kilogram of CO2 that each and every one of us can avoid through our lifestyle and consumer decisions.

In the last week of trading of the year, European carbon emission allowances fell significantly, testing a key technical support line on Friday. On the last trading day of 2022 alone, the trading range was between EUR 80.58 and EUR 85.97 in the new December 2023 benchmark contract, but it was able to recover significantly from the daily low with a closing price of EUR 83.97.

There are no auctions on the Leipzig energy exchange EEX this week. In the coming week, a total of 9,166,500 EUAs will be auctioned over four trading days.

In addition, from Tuesday, January 10th, 2023, auctions in national emissions trading will be held again at a fixed price of EUR 30.00 per national emission allowance.

(Average Quotes Exchange / OTC)
Instrument	23/12/22	30/12/22	Change
EUA (Spot-Market)	88.98 EUR	83.51 EUR	-5.47 EUR
EUA (December-2023-Future)	89.37 EUR	83.97 EUR	-5.40 EUR
VCU (Voluntary Carbon Units ø)	3.81 USD	4.60 USD	+0.79 USD
VER (Gold Standard Spotmarkt ø)	2.75 USD	3.84 USD	+1.09 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	83.92 USD	83.02 USD	-0.90 USD
EURO (Currency, Forex)	1.0614 USD	1.0701 USD	+0.0087 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,

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