Carbon Market News (07/10/2019)

Dear Sir or Madam,

According to a report by the German magazine Spiegel, the climate protection law, which already appears to be less ambitious in its original form, should be further weakened. Among other things, no national target for CO2 reduction is planned for 2040 and the formulation of being greenhouse gas-neutral by 2050 has been weakened by the fact that this should only be “pursued” without obligation. In the end, all that remains is for Germany to reduce its greenhouse gas emissions by 55% by 2030 compared to 1990 levels. Furthermore, the Federal Government is now to be authorized, without the consent of the Federal Council, to decide on changes in the annual emission levels by means of a statutory ordinance. On 06.12.2019 the law should now be decided by the Bundesrat and the Bundestag. Robert Habeck of the Greens had already announced after the launch of the package to want to enforce improvements, especially in the starting price of the certificates, which should cost according to ideas of the grand coalition at the beginning only 10 € and thus have no meaningful control effect.

Prices for European CO2 allowances also fell again in the past week, reflecting stronger global economic risks and Brexit, which is likely to be over at the end of the month. From a technical point of view, the EUAs are now close to an important support line, which has its origins in the second quarter of 2018. They should not break this sustainable on a weekly basis, otherwise the market would be a bear case in the longer term. A total of 16,584,000 certificates will be auctioned at the Leipzig EEX this week, including 801,500 EUAA for aviation. In the coming week, there will be only 11,068,000 EUAs.

  (Average Quotes Exchange / OTC)      
Instrument 27/09/2019 04/10/2019 Change
EUA (Spotmarket) 25.29 EUR 22.94 EUR -2.35 EUR
EUA (December-2019-Future) 25.30 EUR 23.01 EUR -2.29 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 61.04 USD 58.40 USD -2.64 USD
EURO (Currency, Forex) 1.0938 USD 1.0976 USD +0.0038 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. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. 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.)

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With kind regards,

Advantag Services GmbH