Author: advantag

Dear Ladies and Gentlemen,

According to the Federal Environment Agency, the German federal government received more than 12.5 billion euros through carbon emissions trading last year.

For Germany, a total of 101 million emission rights were auctioned on the Leipzig EEX in 2021, which is 6 million EUA less than in the previous year, not least due to the reduction factor of the cap-and-trades system.

The income of 12.5 billion includes a total of 5.3 billion euros from the revenue from EU emissions trading (EU-ETS) and 7.2 billion euros from the national emissions trading system (nEHS) in accordance with the Fuel Emissions Trading Act (BEHG), which includes the transport and building sectors and last year has started.

This income flows into the energy and climate fund and is intended, among other things, to promote climate protection measures, but also to stabilize the recently massive increase in electricity costs. This is intended to push the energy transition further towards decarbonisation. A total of 4.7 billion euros of the income was used to reduce the EEG (Renewable Energy Act) surcharge by 1.37 cents per kilowatt hour in 2021.

However, much more effort will be necessary in the new year to keep the German electricity price in a healthy range for industry and consumers.

In the past week, the prices for European CO2 emission rights (EUA) moved in a range from 79.80 to 88.55 euros and benefited from the increased energy prices and the ongoing pause in auctions on the Leipzig EEX.

This will end tomorrow and a total of 9,921,000 EUAs will be auctioned on four trading days this week.

The auctions in national emissions trading will also resume next week. Up to 10% of the items on December 31, 2021 in the register account of the taxable company can still be auctioned at a price of 25.00 euros per national emission certificate (nEZ) or at an unlimited amount for 30.00 euros.

If you see a need for action here, we will be happy to assist you with advice and action.

(Average Quotes Exchange / OTC)
Instrument	31/12/21	07/01/22	Change
EUA (Spot-Market)	80.36 EUR	85.42 EUR	+5.06 EUR
EUA (December-2022-Future)	80.65 EUR	85.15 EUR	+4.50 EUR
VCU (Voluntary Carbon Units ø)	8.29 USD	8.44 USD	+0.15 USD
VER (Gold Standard Spotmarkt ø)	8.03 USD	8.36 USD	+0.36 USD
nEZ (German National Carbon Units)	25.00 EUR	30.00 EUR	+5.00 EUR
ICE Brent Crude Oil (Benchmark Future)	77.88 USD	81.71 USD	+3.83 USD
EURO (Currency, Forex)	1.1371 USD	1.1362 USD	-0.0009 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 Ladies and Gentlemen,

The EU Commission made headlines at the end of last week when it submitted the proposal to classify nuclear energy and electricity from gas-fired power plants as a transition technology under the EU Taxonomy Regulation, which would give operators and builders of gas and nuclear power plants investment security.

In particular, France, which is strongly oriented towards nuclear power, was accommodated with this proposal, but the Austrian climate protection minister Leonore Gewessler has already announced that it will take legal action against this if such a move is enforced.

The German Federal Economics and Climate Protection Minister Robert Habeck (Greens) also announced that it was fundamentally wrong to label the “high-risk technology” nuclear energy as sustainable, because this obscures the long-term effects on people and the environment, since nuclear waste has left the EU for centuries will burden.

Coal power plants are becoming increasingly unprofitable as a result of CO2 emissions trading, but supply bottlenecks could arise if Russia does not supply enough gas. In addition, three more nuclear power plants in Germany were shut down punctually at the end of 2021.

This inevitably raises the question of how future grid stability is to be guaranteed, since there are not yet enough storage power plants to temporarily store sufficient renewable energy.

The market for CO2 emission rights in Europe developed extremely bullish over the past year. The EUA on the futures market (Dec-2021) cost EUR 32.72 per EUA on December 31, 2020, and the Dec-22 EUA future costs EUR 80.65 on December 31, 2021. This corresponds to an increase of no less than 146.5%, but the prices could not reach the 100 euro mark despite a short-term stay above the 90 euro mark.

The new year opens up new opportunities here and it would not be surprising if the 100 euro mark should be tested at the latest in April shortly before the end of the company’s tax obligation. Of course, this will only happen if there is a correspondingly bullish sentiment.

We wish all our readers of our market report a healthy and successful year 2022!

(Average Quotes Exchange / OTC)
Instrument	24/12/21	31/12/21	Change
EUA (Spot-Market)	76.84 EUR	80.36 EUR	+3.52 EUR
EUA (December-2022-Future)	76.87 EUR	80.65 EUR	+3.78 EUR
VCU (Voluntary Carbon Units ø)	7.98 USD	8.29 USD	+0.31 USD
VER (Gold Standard Spotmarkt ø)	8.53 USD	8.03 USD	-0.50 USD
nEZ (German National Carbon Units)	25.00 EUR	25.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	75.60 USD	77.88 USD	+2.28 USD
EURO (Currency, Forex)	1.1328 USD	1.1371 USD	+0.0043 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 Ladies and Gentlemen,

Looking back to 2021, the carbon market has risen by over 140% since the beginning of the year. This significant price increase is largely due to the influence of numerous speculative investors. Hedge funds have made huge profits with their investments in European pollution rights in the past year and will continue to have a significant influence on price developments in the coming years. Companies that are under obligation to comply under the ETS have already felt the pain and must now – sooner than perhaps expected – adapt their strategic decisions to this high and further rising price level. In addition, so-called activist hedge funds seem to be exerting direct pressure on companies by pushing as shareholders to enforce more environmental protection in the companies. Obviously, the funds have realised that, due to the political environment and public perception, environmentally damaging corporate activities are also damaging to the company’s image and sales and lead to an economic dead end.

On Monday of the past trading week, the reference futures contract expired and the switch to the December 22 contract caused the price to rise significantly. The bullish market was also supported by news from the gas sector, so that as a result the 80-euro mark was again clearly overcome. In the course of the trading week, however, this level could not be maintained. During the auction-free period at the turn of the year, many traders’ desks were not busy, so that high volatility in the thin trading led to a nervous price movement. In the end, most of the initial gains were absorbed again.

(Average Quotes Exchange / OTC)
Instrument	17/12/21	24/12/21	Change
EUA (Spot-Market)	73.28 EUR	76.84 EUR	+3.56 EUR
EUA (December-2021-Future)	73.28 EUR	76.87 EUR	+3.59 EUR
VCU (Voluntary Carbon Units ø)	7.98 USD	7.98 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	8.53 USD	8.53 USD	+0.00 USD
nEZ (German National Carbon Units)	25.00 EUR	25.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	73.08 USD	75.60 USD	+2.52 USD
EURO (Currency, Forex)	1.1237 USD	1.1328 USD	+0.0919 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 Ladies and Gentlemen,

Unfortunately, 2021 will once again make it into the top 10 of the hottest years since weather data began to be recorded. According to projections, the uninterrupted series of record years that began in 2015 will continue again this year. Which place it will take in this inglorious ranking is beside the point. Regionally, numerous climate records were indeed broken again in 2021. According to calculations, land temperatures in the northern hemisphere were on average higher in autumn than ever before and the Arctic continues to warm more than twice as fast as the rest of the world.

In this context, the latest press release of the German Federal Environment Agency is alarming, which states that the share of renewable energies in total electricity consumption will decrease noticeably in 2021 and, after 45.3 percent in 2020, will only reach the level of 2019 with about 42 percent. While total electricity consumption increased, five percent less electricity was generated from renewable sources than in the previous year due to weather conditions. The statement went on to say that renewable electricity production has risen continuously since 1997. So far, individual years with less wind and sun have mostly been compensated for by the addition of new power generation plants. However, this was not the case in 2021, also because only little capacity was added in 2019 and 2020.

This closely follows last Friday’s report by the International Energy Agency (IEA) that global electricity generation from coal will reach an all-time high again this year. The reason for this is the global economic recovery, which is increasing demand for electricity faster than low-carbon energy sources can keep up.

The carbon market first did not find any new orientation last week and so prices moved relatively steadily sideways in a range between 80 and 85 euros. However, this changed on Friday. At the start of trading, the EUA’s initially moved significantly upwards, before they then suffered the biggest daily decline in euros ever. Apparently, despite immediate denials, traders had been spooked in part by the threat of intervention and realised their profits in the run-up to the reference futures contract expiring today. In the process, the price of the EUA’s fell by around EUR 11.50.

(Average Quotes Exchange / OTC)
Instrument	10/12/21	17/12/21	Change
EUA (Spot-Market)	83.73 EUR	73.28 EUR	-10.45 EUR
EUA (December-2021-Future)	83.73 EUR	73.28 EUR	-10.45 EUR
VCU (Voluntary Carbon Units ø)	8.86 USD	7.98 USD	-0.88 USD
VER (Gold Standard Spotmarkt ø)	8.67 USD	8.53 USD	-0.14 USD
nEZ (German National Carbon Units)	25.00 EUR	25.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	75,30 USD	73.08 USD	-2.22 USD
EURO (Currency, Forex)	1.1316 USD	1.1237 USD	-0.0079 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 Ladies and Gentlemen,

In the last week of trading, the European carbon emission allowances reached a new all-time high of 90.75 euros per EUA amid high volatility, were unable to keep the level above the 90s and closed at 88.88. The expected market correction then came on Thursday, with prices falling by 10%. However, Friday was again shaped by the bulls, so that the trading week closed with a significant plus of 7%.

The reasons for the recent price explosion were manifold: Germany has established a new federal government under Chancellor Olaf Scholz (SPD), in which the Greens have received important posts such as the newly formed Ministry for Economic Affairs and Climate Protection as well as the Foreign Ministry and the Ministry of Agriculture. On the other hand, the oil price rose despite higher production volumes agreed by the OPEC, as various delivery bottlenecks were emerging, which brought Brent Crude Oil an increase of 7.6% on a weekly basis.

This week begins the last full week in which a total of 11,428,000 EUA are auctioned on the Leipzig EEX. The last auction of the year with 2,542,500 EUAs will take place on Monday, December 20th, 2021, before a three-week break begins.

Insofar as there is additional bullish news in the market environment, speculatively oriented market participants could see this as a reason to move the market towards the 100 mark again with regard to the auction break. Since many institutional investors are still involved, it remains to be seen whether they want to realize more profit-taking towards the end of the year or whether they are more interested in a high valuation of the holdings as of December 31, 2021. Today, however, the EUA are optimistic with a plus of more than 2%.

This week the last fixed price auctions in Germany’s national emissions trading system (nEHS) will take place at a fixed price of 25.00 euros per ton of CO2e, on Tuesday and Thursday.

In the coming year one can only buy a maximum of 10% of the certificates acquired this year in the nEHS via the fixed price auctions at a price of 25.00 euros. If you haven’t stocked up enough for 2021, we are at your disposal.

(Average Quotes Exchange / OTC)
Instrument	03/12/21	10/12/21	Change
EUA (Spot-Market)	78.23 EUR	83.73 EUR	+5.50 EUR
EUA (December-2021-Future)	78.25 EUR	83.73 EUR	+5.48 EUR
VCU (Voluntary Carbon Units ø)	7.56 USD	8.86 USD	+1.30 USD
VER (Gold Standard Spotmarkt ø)	8.92 USD	8.67 USD	-0.25 USD
nEZ (German National Carbon Units)	25.00 EUR	25.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	70.01 USD	75,30 USD	+5,29 USD
EURO (Currency, Forex)	1.1312 USD	1.1316 USD	+0.0004 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