Category: General

Dear Sir or Madam,

For decades, greenhouse gas emissions in the European Union have not fallen as sharply as they did in 2023 – excluding the 2020 coronavirus year, when they fell by 9.8% – with a decline of 8.3%, as published by the EU Commission last week. EU-wide, greenhouse gas emissions were thus 37% below 1990 levels, and the target for 2030 is 50%.

Unfortunately, this is not only due to carbon emissions trading, technical innovation and the use of renewable energies, but also to the decline in production in the EU, above all in Germany, the largest economy in the EU.

Surprisingly, the economy grew in Germany by 0.2% in the third quarter of 2024, but a recession is expected in the fourth quarter.

Germany’s finance minister, Christian Lindner (FDP), has therefore now written a ‘concept for growth and intergenerational justice’ in which he proposes to cut all unnecessary subsidies and reduce bureaucracy, as well as climate plans in Germany that go beyond EU targets.

The FDP is of the opinion that emissions trading should be the sole instrument, which has demonstrably shown its effectiveness and reduced emissions in all sectors in which a price has been set through the ‘cap-and-trade’ mechanism.

Since this pragmatism is completely contrary to the ideas of the coalition partners, more than a few see an end to this government in the not too distant future.

Last week, EU emission allowances fell back into the red as expected, losing 4.6% on a weekly basis.

It is extremely difficult to predict how the market will develop this week, as political factors such as the outcome of the US elections or a further escalation of the dispute in the German government could have an influence on this, in addition to developments in the energy sector.

This week, 14,582,500 EUA will be auctioned on the EEX over all five trading days, an increase of 24% over the previous week.

The last auction for EUA on the Leipzig Energy Exchange EEX this year will take place on Monday, 16 December 2024, and the first auction in the coming year will take place on Tuesday, 7 January 2025.

In Germany’s national emissions trading scheme (nEHS), the final spurt is now on, with the last auction at which national emission certificates for 2024 (nEZ24) can be purchased this year taking place in just over a month, on Thursday, 5 December 2024.

In the following year, 2025, only 10% of the allowances available on the registry account on 31 December 2024 can be purchased in the nEHS at a price of 45 euros, so no levies should be made this year as part of compliance.

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

(Average Quotes Exchange / OTC)
Instrument	25/10/24	01/11/24	Change
EUA (December-2024-Future)	66.97 EUR	63.87 EUR	-3.10  EUR
VER (Natural Carbon Offsets)	0.51 USD	0.40 USD	-0.09 USD
VER (CORSIA eligible Carbon Offsets)	0.43 USD	0.44 USD	+0.01 USD
nEZ (German National Carbon Units)	45.00 EUR	45.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	76.05 USD	73.33 USD	-2.72 USD
EURO (Currency.. Forex)	1.0795 USD	1.0834 USD	+0.0039 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,

Your Advantag – Team

Dear Sir or Madam,

At present, the political focus in Europe seems to be shifting away from the fight against global warming, even though the Paris Agreement of December 2015 is a binding international treaty. A total of 195 countries have signed the document, committing themselves to greater climate protection. However, economic considerations seem to be the reason for delay and evasion.

Yet maximising short-term profits is the most foolish and selfish way of thinking in the fight against the unbridled forces of nature that are making their way across the world as a result of climate change. In the south-east of the United States, Hurricane Helene has unleashed its full destructive force over the past few days. In Georgia, Florida and North Carolina, but also in Virginia, Tennessee and Kentucky, the tropical storm has caused catastrophic, historic flooding and devastating damage. Many homes have been destroyed, at least 3 million households are without power, and more than 40 people have died. Reinsurance broker Gallagher Re estimates that preliminary private insurance losses could range from three to six billion US dollars.

Southeastern Europe experienced its hottest summer on record, according to a preliminary assessment by the EU’s climate service, Copernicus. People in the region were exposed to “severe heat stress” on 66 days between June and August. This is by far the highest number of severe heat stress days in south-eastern Europe, where the average is 29. The highest water temperature ever recorded was in the Mediterranean. On 24 July, the average water surface temperature between Gibraltar and Tel Aviv reached a record 28.71 degrees Celsius.

From 12 to 15 September, a powerful low-pressure system affecting mainly Germany, Austria, the Czech Republic, Slovakia, and Poland brought the heaviest four-day rainfall ever recorded in Central Europe. Austria suffered the largest economic loss from a natural catastrophe in the Alpine country’s history.

With the exponential increase in the frequency and intensity of such events, it is becoming increasingly difficult if not impossible to insure against such losses, and it is clear that policymakers cannot afford to lose a second in implementing effective measures to reduce greenhouse gas emissions. Waiting or procrastinating simply does not make economic sense. And there should be no question of using populist arguments to torpedo the EU Emissions Trading Scheme for road transport and fuels (ETS2). Reducing greenhouse gas emissions is logically essential to achieving climate change targets, and the cap-and-trade system of emissions trading is designed to ensure absolute target accuracy in a fair way.

At the start of last week, sentiment in the CO2 market shifted to a gentle but solid sideways uptrend. On Thursday, the price of December futures reached its weekly high of EUR 66.75 and on Friday it closed the week not far from that level. This could indicate that the positive channel will remain in place next week and that the price could approach the 70 euro mark again. On the other hand, if the current rally is primarily related to September options expiration, then further gains this week would be unlikely.

(Average Quotes Exchange / OTC)
Instrument	20/09/24	27/09/24	Change
EUA (December-2024-Future)	63.39 EUR	66.33 EUR	+2.94 EUR
VER (Natural Carbon Offsets)	0.30 USD	0.33 USD	+0.03 USD
VER (CORSIA eligible Carbon Offsets)	0.24 USD	0.37 USD	+0.13 USD
nEZ (German National Carbon Units)	45.00 EUR	45.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	74.94 USD	71.99 USD	-2.95 USD
EURO (Currency.. Forex)	1.1163 USD	1.1166 USD	+0.0003 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,

Your Advantag – Team

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)
Instrument	06/09/24	13/09/24	Change
EUA (December-2024-Future)	66.50 EUR	64.99 EUR	-1.51 EUR
VER (Natural Carbon Offsets)	0.31 USD	0.27 USD	-0.04 USD
VER (CORSIA eligible Carbon Offsets)	0.20 USD	0.23 USD	+0.03 USD
nEZ (German National Carbon Units)	45.00 EUR	45.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	72.27 USD	72.49 USD	+0.22 USD
EURO (Currency.. Forex)	1.1085 USD	1.1071 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