Author: advantag

Dear Madam or Sir,

The Federal Environment Agency, together with the Federal Ministry for Economic Affairs and Climate Protection, has issued a press release on the development of greenhouse gas emissions in Germany in 2021. All in all, the figures show that after a strong decline in 2020, emissions rose again significantly, by a good 33 million tonnes or 4.5 percent.

The rise is particularly noticeable in the energy sector: This shows a plus of 27 million tonnes of CO2-equivalents, as more coal was used for electricity generation due to increased electricity demand, lower electricity generation from renewable energies and the higher price of gas. Electricity generation from renewables fell by seven per cent, mainly due to poor wind conditions.

German State Secretary for Climate Patrick Graichen commented: “The rise in greenhouse gas emissions has unfortunately been on the horizon. The German government will now quickly counteract this with an immediate climate protection programme. The key is a much faster pace in the expansion of renewable energies. We must manage to install three times as much capacity as before in order to increase the share of renewables in electricity generation to 80 percent by 2030. There must be no more of the kind of deadlock that we have seen in recent years. The Russian war of aggression on Ukraine has also made it dramatically clear to us how closely security and energy supply are linked. … The faster transition away from fossil energies must encompass all areas – from industrial production and buildings to mobility and agriculture. The decisive factor here is to maintain the social balance.”

Since 1990, emissions in Germany have thus fallen by only 38.7 percent. The target for 2030 is a minus of 65 percent. The available data show that since 2010, the energy turnaround in particular has contributed to the reduction of emissions. All other significant sectors have more or less stagnated since 2010. As a meeting of EU environment ministers last Thursday showed, a growing number of EU member states are willing to support a second emissions trading system for buildings and transport.

European pollution allowances saw a significant sideways movement in a range of 76 – 80 euros during the past trading week. At the end of the week, EUAs were even traded in their narrowest weekly range since the end of 2021, as the 80-euro mark apparently acted like a magnet and at the same time represented a stable technical resistance.

(Average Quotes Exchange / OTC)
Instrument	11/03/22	18/03/22	Change
EUA (Spot-Market)	76.38 EUR	78.84 EUR	+2.46 EUR
EUA (December-2022-Future)	76.39 EUR	78.89 EUR	+2.50 EUR
VCU (Voluntary Carbon Units ø)	7.32 USD	8.42 USD	+1.10 USD
VER (Gold Standard Spotmarkt ø)	9.32 USD	8.00 USD	-1.32 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	112.40 USD	108.21 USD	-4.19 USD
EURO (Currency, Forex)	1.0912 USD	1.1091 USD	+0.0179 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. VCUs and VERs are average prices (CBL markets). 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

Ladies and gentlemen,

With the war in Ukraine, Putin is showing the West how powerless it is, since NATO intervention in the war would undoubtedly lead to a further escalation, in which the use of nuclear weapons cannot be ruled out.

What is particularly absurd, however, is the fact that Europe, and above all Germany, has made itself dependent on Russian natural gas and oil with its current energy policy. With every third litre of petrol, diesel or heating oil and with every second cubic meter of natural gas, we help finance the warmongers.

A radical change in energy policy is therefore required to prevent such toxic dependencies. And this can only be done through the further expansion of renewable energies, which at the same time achieves the decarbonization of the economy and society.

But the war in Ukraine has not only raised the prices of energy over the past week, but also of all other commodities, not least food and metals, which is driving up inflation accordingly.

Exactly the opposite effect was seen in the emission allowances last week, which showed the largest slump ever recorded. While the December contract was still showing an opening price of EUR 95.00 per EUA when the war began on February 24, 2022, the price slipped to a low of EUR 55.00 last Wednesday, which corresponds to a loss of 42%. By the end of the week, prices stabilized above the EUR 60 mark and closed at above EUR 65 last Friday.

The main reasons for the sharp decline were institutional investors and energy companies, which had to obtain liquidity through the sales, and technical sales were also triggered by the crash.

Since no one can currently predict with certainty how the situation in Ukraine will develop this week, high volatility on the commodity and energy markets and in emission certificates can be expected in the coming days. This morning, the quote for EUAs is still under pressure and just above 60-Euro-mark.

(Average Quotes Exchange / OTC)
Instrument	25/02/22	04/03/22	Change
EUA (Spot-Market)	87.74 EUR	65.48 EUR	-22.26 EUR
EUA (December-2022-Future)	88.14 EUR	65.10 EUR	-23.04 EUR
VCU (Voluntary Carbon Units ø)	9.44 USD	5.45 USD	-3.99 USD
VER (Gold Standard Spotmarkt ø)	10.27 USD	9.84 USD	-0.44 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	94.40 USD	118.03 USD	+23.63 USD
EURO (Currency, Forex)	1.1272 USD	1.0931 USD	-0.0341 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. VCUs and VERs are average prices (CBL markets). 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,

Putin’s long-prepared invasion of Ukraine has exposed a number of national and international mistakes and deficits which cannot be remedied or compensated for overnight. This repugnant act was described by Chancellor Scholz as a “turning point in time”, which is undoubtedly correct. What is questionable is where this turn of the times will lead. The previous international security policy has at least partly collapsed like a house of cards.

With the sanctions adopted so far, an alliance of states is trying to isolate the aggressor and its supporters politically and economically and thus ruin them financially. Whether this will succeed remains to be seen, while hundreds of millions of foreign currencies are pumped into the Russian war chest every day because states around the globe continue to import Russian oil, gas and coal. A fact that is absolutely obvious in a globalised world, but difficult to bear in this situation. Everyone has to ask themselves how far solidarity goes, how many hardships, deprivations and cuts in their own prosperity they are willing to sacrifice. As one commentator aptly put it: “There is no such thing as freedom for free”.

The international financial markets have logically reacted sensitively. The market for European pollution rights has also fallen back as an immediate reaction, although the loss over the course of the week does not show this so clearly. However, just before the Russian troops invaded, the EUAs were already close to the 96 euro mark again and then lost around 10 euros. Overall, however, market participants seem to expect prices to rise again. If more energy had to be generated from coal, then unfortunately emissions would also rise and with them the need for certificates. In today’s early trading, however, the price started lower again and is now charting above the 84 euro mark.

(Average Quotes Exchange / OTC)
Instrument	18/02/22	25/02/22	Change
EUA (Spot-Market)	89.05 EUR	87.74 EUR	-1.31 EUR
EUA (December-2022-Future)	89.47 EUR	88.14 EUR	-1.33 EUR
VCU (Voluntary Carbon Units ø)	10.77 USD	9.44 USD	-1.33 USD
VER (Gold Standard Spotmarkt ø)	9.00 USD	10.27 USD	+1.27 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	91.17 USD	94.40 USD	+3.23 USD
EURO (Currency, Forex)	1.1319 USD	1.1272 USD	-0.0047 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. VCUs and VERs are average prices (CBL markets). 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 storms Ylenia, Zeynep and Antonia caused a lot of human and material damage in Europe. According to an initial estimate, insured losses of EUR 900 million were caused by Zeynep in Germany and the losses insured by Ylenia also amount to at least EUR 500 million. Together with Antonia, who crossed us last night, the financial impact is well into the billions.

The new week will probably bring still a lot of wind, especially in northern Germany. Accordingly, more than 60% of Germany’s energy production was secured by wind energy yesterday afternoon. A total of 79% was generated from renewable sources, reducing carbon emissions per kWh to 141 grams. Coal accounted for only 10% of the energy mix and natural gas for less than 5%.

The prices for carbon emission allowances in Europe fell not only because of the lower demand in the energy sector and the ongoing Ukraine crisis, but also because Peter Liese, who sits for the German conservative party CDU and member of the European People’s Party in the EU Parliaments environment committee, had concerns about the strong price increase for European emission allowances (EUA). He therefore suggested that, in line with the market stability reserve introduced a few years ago, the auctioning of additional emission allowances should be made easier, but he wanted to prevent greater price volatility and a corresponding price collapse.

Currently, the regulations of the EU ETS allow further EUAs to be auctioned under certain circumstances, including if the carbon price is three times the average price of the last two previous years for at least 6 months. Some EU parliamentarians had now expressed ideas about releasing a further 100 million CO2 certificates from their “market stability reserve” if the CO2 price was twice as high as the average price in the two previous years for at least 6 months.

However, since everything takes a while with the bureaucracy monster EU, the concrete proposals are to be discussed in June and it cannot be assumed that any concrete measures will be drafted before the summer break.

(Average Quotes Exchange / OTC)
Instrument	11/02/22	18/02/22	Change
EUA (Spot-Market)	92.45 EUR	89.05 EUR	-3.40 EUR
EUA (December-2022-Future)	92.87 EUR	89.47 EUR	-3.40 EUR
VCU (Voluntary Carbon Units ø)	10.02 USD	10.77 USD	+0.75 USD
VER (Gold Standard Spotmarkt ø)	9.00 USD	9.00 USD	+0.00 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	94.86 USD	91.17 USD	-3.69 USD
EURO (Currency, Forex)	1.1352 USD	1.1319 USD	-0.0033 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. VCUs and VERs are average prices (CBL markets). 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