Emissions Trading / Carbon Market News (11/04/2022)

Dear Madam or Sir,

The terrible war in Ukraine and the still omnipresent corona pandemic dominates the news, leaving little time for other topics. That is why we are pointing out the climate crisis in particular today, which will continue to develop in the direction of a catastrophe if we do not see Corona and the war in Ukraine and the associated problems with the supply of fossil fuels as an opportunity to immediately set the course towards to decarbonize the world.

From the beginning of industrialization to 2019, humanity released a total of 2,400 gigatonnes of greenhouse gases. In the period from 1850 to 1989, i.e. within 140 years, there were 1,400 gigatonnes of CO2e, i.e. 58% of the total emissions. Over the last three decades from 1990 to 2019, we released the remaining 1,000 gigatonnes of CO2e into the atmosphere. And the last decade sets another, sad record – in the period 2009-2019 it was 410 gigatonnes of CO2e, which is 17% of the emissions between 1850 and 2019.

Last week, the German federal government decided on the course for the reassignment of CO2 pricing in the building sector, which is now to begin in 2023. So far, this has been borne entirely by the heating costs of the tenants, but from next year there will be a phased model that passes the burden on to the landlord in terms of how harmful his building is to the climate.

If an apartment has a poor energy balance of more than 52 kilograms of CO2 per square meter, the landlord now pays 90% and the tenant only 10% of his heating costs. This should then be reduced in up to 10 steps down to 0% for the landlord, insofar as the building complies with the EH55 energy standard or better. In this case, the tenant continues to bear all costs for CO2 pricing in accordance with the Fuel Emissions Trading Act (BEHG).

Germany was the first country in Europe to introduce national emissions trading through BEHG, and the European Union is now toying with the idea of ​​introducing this across the EU in order to ensure that CO2 emissions in the building and transport sectors are priced accordingly in all countries. It will be interesting to see how quickly this will be implemented.

Due to the Easter holidays, there will only be an auction on EEX on four days this week and the following week; in the coming week there will only be three auction dates for EU emission allowances. Accordingly, the prices have now been slightly bullish and closed above the 80-euro-mark on Friday.

  (Average Quotes Exchange / OTC)   
Instrument01/04/2208/04/22Change
EUA (Spot-Market)78.28 EUR80.15 EUR+1.87 EUR
EUA (December-2022-Future)78.49 EUR80.09 EUR+1.60 EUR
VCU (Voluntary Carbon Units ø)10.99 USD11.45 USD+0.46 USD
VER (Gold Standard Spotmarkt ø)6.29 USD5.98 USD-0.31 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)104.38 USD102.27 USD-2.11 USD
EURO (Currency, Forex)1.1028 USD1.0875 USD-0.0153 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

Emissions Trading / Carbon Market News (14/03/2022)

Dear Madam or Sir,

The war in Ukraine was the dominant topic on the international financial and commodity markets last week.

Due to the high oil price in connection with the weakening euro, this also has a direct impact on consumers worldwide. However, the markets seem to have digested the first shock and have clearly moved away from the highs of the past few days.

A typical counter-movement could also be seen in the case of CO2 certificates, which have visibly recovered from the lows of EUR 55 in the previous week.

In the past week, prices rose again towards the 80 euro mark and were able to exceed this shortly after the start of trading today.

Also in the new trading week, the war in Ukraine will remain the market movement on the financial, energy and commodity markets.

If the situation in Ukraine eases, the approaching end of the submission deadline for emission allowances on April 30, 2022 will again come into the focus of market participants and could cause prices to rise to the level before the Russian invasion of Ukraine.

  (Average Quotes Exchange / OTC)   
Instrument04/03/2211/03/22Change
EUA (Spot-Market)65.48 EUR76.38 EUR+10.30 EUR
EUA (December-2022-Future)65.10 EUR76.39 EUR+11.29 EUR
VCU (Voluntary Carbon Units ø)5.45 USD7.32 USD+1.87 USD
VER (Gold Standard Spotmarkt ø)9.84 USD9.32 USD-0.52 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)118.03 USD112.40 USD-5.63 USD
EURO (Currency, Forex)1.0931 USD1.0912 USD-0.0019 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

Emissions Trading / Carbon Market News (07/02/2022)

Dear Madam or Sir,

The European Commission has agreed to allow investments in new gas and nuclear power plants in the European Union to be considered climate-friendly under certain conditions. Not only the German Federal Environment Agency of Economics and Climate Minister Robert Habeck have expressed clear criticism here, but the European Commission adopted the corresponding legal act and thus created the basis for investment decisions in gas and nuclear power.

Investments in new gas-fired power plants should be considered sustainable by the end of the decade, insofar as they then replace dirtier power plants and can be operated entirely with more climate-friendly gases, such as hydrogen produced in a climate-friendly manner, by 2035.

Austria and Luxembourg have already announced that they will take legal action, and the Netherlands, Spain, Sweden and Denmark have also spoken out against a sustainable classification of gas.

At the same time, German gas storage facilities are only 37% full and one can be lucky that the winter is currently very mild, as the “Aggregated Gas Storage Inventory” (AGSI) platform reported last week.

The Federal Republic of Germany consumed around 1,000 TWh of natural gas last year, most of which came from Russian pipelines. The German gas storage facilities can store a good quarter, i.e. a little more than 250 TWh, and act as a buffer. On particularly intensive days, they supply up to 60% of the required demand.

Germany is – just to keep gas prices from rising any further – dependent on the delivery of Russian gas using the delivery route known to date, but also to a large extent through Nord Stream 2, because more than half of the gas deliveries come from Russia, followed by one almost a third from Norway.

Liquefied natural gas (LNG) from overseas is on the one hand even less environmentally friendly due to its origin (partly fracking) and the transport with tankers, and on the other hand it is also visibly more expensive than gas from pipelines.

It remains to be seen how politics will react to this dilemma in the coming weeks.

The prices for European carbon emission allowances reached a new all-time high last week, which was 96.95 euros per ton of carbon on Friday in the December contract and is therefore only a good three euros away from the 100-euro mark.

  (Average Quotes Exchange / OTC)   
Instrument28/01/2228/01/22Change
EUA (Spot-Market)89.48 EUR96.03 EUR+6.55 EUR
EUA (December-2022-Future)89.92 EUR96.45 EUR+6.53 EUR
VCU (Voluntary Carbon Units ø)7.51 USD8.40 USD+0.89 USD
VER (Gold Standard Spotmarkt ø)7.55 USD8.00 USD+0.45 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)90.59 USD92.80 USD+2.21 USD
EURO (Currency, Forex)1.1131 USD1.1447 USD+0.0316 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

Emissions Trading / Carbon Market News (06/12/2021)

Dear Sir or Madam,

European greenhouse gas emission allowances rose a whopping 7.5% last week, even if they could not stay above the 80 euros per EUA mark, which was first conquered on Friday, at the weekly closing rate.

Another trigger was, despite the inconsistent energy price developments, information from a fund manager who still sees prices in the three-digit range in 2021. After the EUAs have already increased by a good 140% this year and have experienced a price increase of around 1,160% in the last five years, that would not be surprising, because an age-old stock exchange rule says: “the trend is your friend”.

For compliance buyers and portfolio managers, it is more difficult to answer the question of whether one should stock up at least part of the portfolio now or rather wait until there is a corresponding correction on the market.

From a technical point of view, the time would have come for the market to undertake a correction, which would have the first support in the area around 70 euros and then a little above the 60 euros mark.

In any case, the EU member states are currently extremely divided on how to react to this bull market, which makes short-term market intervention seem unlikely. However, statements from official sources alone could lead market participants to take short positions. The coming trading week will definitely remain interesting.

In the new trading week, a total of 11.4 million EUA will be auctioned on the Leipzig EEX on all five bank working days, as will the next week. On Monday, December 20th, 2021, an auction of 2,542,500 EUAs will take place for the last time this year; on the same day is also the last trading day of ICE-EUA-December-2021-Futures.

The first auction in 2022 will not start until the second calendar week on January 10th, and a total of 9,291,000 EUAs will be auctioned on four days in the second week.

In the national German emissions trading system, the available trading days are also drawing to a close. During this and the next trading week, only four fixed price auctions will take place on Tuesdays and Thursdays.

If companies subject to the tax do not take part in these dates, they only have the chance to get national emission certificates (nEZ) on the secondary market (OTC / over the counter) this year.

At a price of EUR 25.00 you can only purchase nEZ if you have already purchased some by the end of the year – and then only 10% of this amount. After that, the nEZ costs 30.00 euros or you can try to get OTC pieces on the secondary market.

  (Average Quotes Exchange / OTC)   
Instrument26/11/2103/12/21Change
EUA (Spot-Market)72.77 EUR78.23 EUR+5.46 EUR
EUA (December-2021-Future)72.78 EUR78.25 EUR+5.47 EUR
VCU (Voluntary Carbon Units ø)7.44 USD7.56 USD+0.12 USD
VER (Gold Standard Spotmarkt ø)8.68 USD8.92 USD+0.24 USD
ICE Brent Crude Oil (Benchmark Future)72.82 USD70.01 USD-2.81 USD
nEZ (German National Carbon Units)25,00 EUR25,00 EUR0,00 EUR
EURO (Currency, Forex)1.1316 USD1.1312 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

Emissions Trading / Carbon Market News (29/11/2021)

Dear Sir or Madam,

In Germany, the coalition negotiations have come to an end and the new government consisting of the SPG, Greens and FDP, which will soon begin, wants to set clear accents in the area of ​​climate protection.

There should be a minimum price of 60 euros per ton of CO2 or its equivalent for greenhouse gas emissions and climate money, which should particularly benefit households with low incomes. These should also receive a one-off heating cost allowance.

The cost of CO2 certificates in national emissions trading should not be increased any further due to the already high energy prices.

Furthermore, the EEG surcharge is to be discontinued from 2023, which in particular should lower electricity prices and thus also serve electromobility.

The high prices for CO2 emissions alone make the generation of electricity from coal increasingly unprofitable and transition technologies such as gas will move into the focus of energy supply companies until the further expansion of renewable energies has progressed sufficiently.

From 2025, all newly installed heating systems in residential buildings are to be operated on the basis of at least 65% renewable energies.

Only when vehicles with internal combustion engines are phased out there should not be an end date in Germany, as is the case in many other markets. However, from 2023 only vehicles with a demonstrably positive climate effect will be funded, which can also travel at least 80 kilometers electrically, which is aimed at plug-in hybrids.

The market for EU emission rights reacted clearly bullish to the plans of the largest European economy and rallied on Thursday with a new all-time high of EUR 75.05.

Since the financial markets reacted very clearly to the new South African virus mutation and impending further lockdowns towards the end of the last week of trading, the EUA could not take this high-altitude flight with them until the end of the week, but closed with a plus of 3.41 euros confidently above the 70- Euro mark. At today’s start of trading, however, the EUA reached another all-time high, which is now at EUR 75.25.

In the national German emissions trading system, there are now six more dates in the next three weeks, on Tuesdays and Thursdays, at which companies subject to the tax can still buy regularly at a price of 25 euros.

If you have any further questions, please do not hesitate to contact our consultants.

  (Average Quotes Exchange / OTC)   
Instrument19/11/2126/11/21Change
EUA (Spot-Market)69.36 EUR72.77 EUR+3.41 EUR
EUA (December-2021-Future)99.36 EUR72.78 EUR+3.42 EUR
CER (Voluntary Spot-Market ø)4.78 USD4.78 USD+0.00 USD
VER (Gold Standard Spotmarkt ø)13.69 USD13.69 USD+0.00 USD
ICE Brent Crude Oil (Benchmark Future)78.43 USD72.82 USD-5.61 USD
EURO (Currency, Forex)1.1282 USD1.1316 USD+0.0034 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. CERs and VERs are average prices in the voluntary carbon offsetting market (eco securities). 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