Emissions Trading / Carbon Market News (16/09/2024)

Dear Sir or Madam,

According to a study by the think tank ‘Agora Agrar’, greenhouse gas emissions in the European Union could be halved by 2045 in the agricultural sector and especially in peatlands used for agriculture.

In line with this, EU Commission President Ursula von der Leyen last Friday called for new financial instruments, similar to the EU Emissions Trading System (EU ETS), which “reward those who serve this planet”.

In particular, companies that benefit from an intact natural environment should financially reward local communities for preserving it. Von der Leyen gave examples such as pure spring water or orchards that rely on bees.

At the end of her speech, the Commission President explained that intensive work was already underway with EU member states to develop the first pilot projects to support this process.

Prices in the EU ETS slumped further for the fourth week in a row last week, closing down 2.3% just below the EUR 65 mark and hitting a seven-week low at the same time. The 200-day line, which currently stands at 66.24, was only temporarily broken upwards at the beginning of the week, but proved to be a stable resistance. It remains to be seen whether the EUA will succeed in sustainably overcoming this barrier this week or whether the price will trend towards the EUR 60 line.

Auctions totalling 12,658,000 emission allowances are scheduled on the EEX on all five trading days this week, including 906,000 EUAs for aviation on Wednesday, which can also be used for stationary installations.

In view of the current situation, we would like to point out that it is important that companies obliged to surrender their national emission allowances for the year 2024 (nEZ24) in Germany’s national emissions trading system in accordance with the BEHG only surrender them in the coming year so that they are available on the registry account on 31 December 2024 and thus the purchase option of 10% of this volume can be exercised in the coming year at the same price of EUR 45.00.

If you have any questions, please do not hesitate to contact us.

    (Average Quotes Exchange / OTC)       
Instrument06/09/2413/09/24Change
EUA (December-2024-Future)66.50 EUR64.99 EUR-1.51 EUR
VER (Natural Carbon Offsets)0.31 USD0.27 USD-0.04 USD
VER (CORSIA eligible Carbon Offsets)0.20 USD0.23 USD+0.03 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)72.27 USD72.49 USD+0.22 USD
EURO (Currency.. Forex)1.1085 USD1.1071 USD-0.0014 USD

(The VER quotes are average rates (carboncredits.com). which can be used within the framework of CORSIA and voluntary carbon offsetting, 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.)

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

With kind regards,

Advantag GmbH

Emissions Trading / Carbon Market News (22/07/2024)

Ladies and Gentlemen,

Last year, the German government generated record revenues of more than 18 billion euros by the European Emissions Trading System.

At the same time, greenhouse gas emissions in the German plants covered by the EU Emissions Trading Scheme fell by 18% to 289 million tons, the largest decline since the introduction of emissions trading in 2005. Across the EU, the overall decline amounted to 17%. In total, 1.09 billion tons of CO2 or its equivalent in other greenhouse gases were thus emitted in the sectors subject to the EU ETS.

Gross electricity generation in particular contributed to this, as electricity generation from lignite fell by 25% and that from hard coal by as much as 36% compared to the previous year.

And in the first half of 2024, electricity consumption from renewable energies continued to rise visibly year-on-year to 147 terawatt hours in Germany, which corresponds to an increase of 9% according to the Federal Environment Agency. The share of renewables was therefore around 57%.

These declines naturally lead to lower demand for emission rights, which is why the price of carbon emission allowances remained bearish last week and fell by 4.2% at the end of the week.

There is a current technical support line at 65.75 and the next resistance level is the 200-day line at 68.76.

As the Polish auction does not take place on Wednesday as scheduled, the EEX will only auction 11,094,500 EUAs on the remaining trading days this week.

    (Average Quotes Exchange / OTC)       
Instrument12/07/2419/07/24Change
EUA (December-2024-Future)69.19 EUR66.30 EUR-2.89 EUR
VER (Natural Carbon Offsets)1.03 USD1.01 USD-0.02 USD
VER (CORSIA eligible Carbon Offsets)0.24 USD0.21 USD-0.03 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)85.44 USD81.69 USD-3.75 USD
EURO (Currency.. Forex)1.0912 USD1.0883 USD-0.0079 USD

(The VER quotes are average rates (carboncredits.com). which can be used within the framework of CORSIA and voluntary carbon offsetting, 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.)

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

With kind regards,

Advantag Services GmbH

Season Greetings

Dear business partners,

The year 2023 also brought great challenges for all of us and was further overshadowed by the Russian war of aggression on Ukraine and the Hamas attack on Israel and the ongoing fighting in the Gaza Strip.

Inflation, especially at the beginning of the year, high interest rates and political quarrels have influenced all companies, which is why reliable business partners and reliable and committed employees have a great anchoring effect.

We would therefore like to thank you very much for the good and trusting cooperation this year!

The Advantag team wishes you, your friends, family members, employees and colleagues a Merry Christmas and a good start to a hopefully more peaceful, healthy and successful New Year 2024!

In 2023, too, we will not be giving away material things, but will remain active in the spirit of climate protection by once again jointly promoting global climate protection projects and supporting the great work of action medeor e. V. from Toenisvorst helps people in need.

For 2023, we have therefore decided on the “Mersin Wind Farm Project” and “Soma Wind Farm Project” in Turkey. We support the expansion of renewable energies in Turkey. In this way, we are jointly improving the air quality of local people, reducing particulate matter emissions and at the same time helping to reduce greenhouse gas emissions in the Turkish energy sector.

We hope to continue to work with you in the new year 2024.

Your Advantag team

Emissionshandel / CO2 – Marktbericht vom 30.10.2023

Dear Madam or Sir,

Agora Energiewende is a German think tank that has set itself the task of looking for compromise solutions that can attract a majority when restructuring the electricity sector within the energy transition in Germany.

An important task here is to consider the steering effect of monetary control elements and their acceptance among the population. Agora also focuses on the pricing of the transport and real estate sectors, as there is considerable potential for decarbonization, but also for social explosives.

From 2027, the pricing of these sectors in Germany will no longer be the responsibility of the national emissions trading system, but rather the European emissions trading system. However, this will not be the ordinary EU ETS, whose prices are currently just under 80 euros per tonne of CO2 or its equivalent in other greenhouse gases (CO2e), but a further emissions trading system (EU ETS II).

Germany is expected to miss its climate protection targets in these sectors by 200 million tonnes of carbon emissions by 2030. Agora Energiewende therefore recommends that the transition to the EU ETS II should be well prepared to avoid unexpected price increases for fuels and heating materials.

According to Agora forecasts, this would otherwise lead to increases of 38 cents per liter of gasoline and around 3 cents per kilowatt hour of natural gas at the beginning of 2027, compared to 2026.

The think tank therefore recommends increasing the price in the German national emissions trading system nEHS from the current 30 euros per national emissions certificate (nEZ) to 60 euros from 2024, which would correspond to an increase in the price of gasoline by around 0.09 euros. This would provide the federal government with approximately 6.6 billion euros in additional revenue, which would provide residents with 80 euros in relief, which would flow back in the form of climate money (“Klimageld”).

Free trading in national emissions trading should then be brought forward by one year to 2025 and have a price corridor of 60 to 80 euros, then 90 to 110 euros in 2026. Accordingly, climate money should also increase, which should be reimbursed to the German citizens.

As always, however, optimal communication work would be required here, and the reduction of bureaucratic hurdles would be an essential part of achieving acceptance among the population.

If the federal government were able to achieve this, an important milestone would be achieved on the path to decarbonizing the real estate and transport sectors. Unfortunately, the author of these lines is currently lacking optimism that the federal government will achieve this, as even Economics and Climate Minister Robert Habeck sees it as unlikely that the climate money will benefit citizens in the current legislative period.

Prices in European emissions trading remained bearish last week and lost a further 2.5% on a weekly closing price basis within the sideways-downward channel.

This channel is currently in the range between 78.25 and 86.65 euros, which should also be the trading range for the coming week. The 38-day line is currently at 83.28 and the 200-day line is at 86.66 euros.

Due to the missing two-weeks-Wednesday Polish auction, a total of only 11,253,500 EUAs will be auctioned on the Leipzig EEX this trading week. The strength of demand at current price levels could be an important indicator of short-term price developments.

      (Average Quotes Exchange / OTC)   
Instrument20.10.2327.10.23Veränderung
EUA (December-2023-Future)81,41 EUR79,35 EUR-2,06 EUR
VER (Natural Carbon Offsets)1,59 USD1,41 USD-0,18 USD
VER (CORSIA eligible Carbon Offsets)0,74 USD0,65 USD-0,09 USD
nEZ (German National Carbon Units)30,00 EUR30,00 EUR+0,00 EUR
ICE Brent Crude Oil (Benchmark Future)92,38 USD88,79 USD-3,59 USD
EURO (Currency, Forex)1,0596 USD1,0578 USD-0,0018 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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.)

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

With kind regards,

ADVANTAG Services GmbH

Emissions Trading / Carbon Market News (09/10/2023)

Dear Madam or Sir,

In the first six months of this year, emissions from electricity generation in the European Union fell by 17%, due in particular to the further expansion of renewable energies and the lower use of coal at EU level. This corresponds to a decrease of approximately 59 million tons of CO2.

But it is not only the EU that has made a positive presentation here, but also one of the world’s main emitters of greenhouse gases, the USA. Here, carbon emissions from electricity generation also fell by 8.6% in the first half of 2023, which was due to the 27% decline in coal-fired power generation. And in Japan, emissions from fossil fuels in electricity generation also fell by a remarkable 12%, as the energy think tank Ember reported. As a result, Japan emitted 25 million tons of carbon less in the first half of 2023.

Globally, this has meant that carbon emissions from electricity generation have remained almost unchanged and may have reached their peak here.

However, the German federal government is clearly missing its emissions reduction targets in the buildings and transport sectors, even though the federal government has presented a new climate protection program. There remains around 200 million CO2 too much, which makes achieving the climate protection goals a long way off, as does the goal of being net zero by 2045.

The new EU Climate Commissioner Wopke Hoekstra has now spoken out in favour of a target of 90% reduction in greenhouse gas emissions by 2040. According to calculations by analysts of the London Stock Exchange, this would mean a price for a ton of carbon emission or its equivalent in other greenhouse gases (CO2e) of more than 400 euros per ton.

Currently, the prices for European Emission Allowances remain under pressure and ended with a loss of 1.21 euros or 1.5% based on the weekly closing price. Last Tuesday, the benchmark future EUA-December-2023 closed below the 80-euro-mark for the first time since the beginning of February, but was able to assert itself above it again from Wednesday, even if Brent oil lost a significant 8.5% on a weekly basis.

What will be interesting next week will be to what extent the Hamas attack on Israel contributes to the uncertainty in the financial, energy and commodity markets regarding a potential expansion.

Last Wednesday, a primary market auction of 1,000,000 EUA for Northern Ireland took place on the European Energy Exchange for the first time this year. Due to the Polish auction next Wednesday, a total of 14,599,500 EUA will be auctioned on all trading days this week.

  (Average Quotes Exchange / OTC)   
Instrument29/09/2306/10/23Change
EUA (December-2023-Future)81.67 EUR80.46 EUR-1.21 EUR
VER (Natural Carbon Offsets)1.82 USD1.74 USD-0.08 USD
VER (CORSIA eligible Carbon Offsets)0.75 USD0.74 USD-0.01 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)92.29 USD84.45 USD-7.84 USD
EURO (Currency, Forex)1.0589 USD1.0588 USD-0.0001 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