Category: General

Dear Sir or Madam,

the European pollution rights have become significantly more expensive for another week in a row, and in the second half of the week they started moving towards the 26-euro mark. Moderate but persistent optimism on the corona virus supported the markets, which was also reflected in oil prices.

During the weekend, however, there was alarming news of new infections from South Korea and Italy, which put into question the apparent easing signaled by China. In a globalised world, the spread of a new virus appears to be increasingly difficult to control.

As a result of this situation, the oil price fell by almost two US dollars over the weekend and pulled down the CO2 emission certificates at the start of trading this morning.

At the ICE in London the auction dates for the accumulated British EUA were announced as expected. In a rather relaxed rhythm of two to three auctions per month, this year, starting with around 5.7 million allowances on 4 March, a total of little more than 125 million EUAs will be auctioned in London on Wednesdays. However, this should not lead to additional price pressure, as the figures were known for a long time.

(Average Quotes Exchange / OTC)
Instrument	14/02/2020	21/02/2020	Change
EUA (Spotmarket)	24.24 EUR	25.55 EUR	+1.31 EUR
EUA (December-2019-Future)	24.29 EUR	25.61 EUR	+1.32 EUR
CER (Spotmarket)	0.25 EUR	0.24 EUR	-0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	57.34 USD	58.44 USD	+1.10 USD
EURO (Currency, Forex)	1.0831 USD	1.0848 USD	+0.0017 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.)

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

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

There are new records in the climate change category almost every day. The measuring station in Manua Loa, Hawaii, recorded an absolute maximum CO2 concentration of 416.08 ppm (parts per million) in the atmosphere – in February.

In addition, researchers had a new temperature record in the Antarctic a few days ago. Brazilian soil scientist Carlos Schaefer told the AFP news agency on Thursday that a temperature of 20.75 degrees measured on the northern tip of Antarctica on February 9. Schaefer said “There has never been such a high temperature in Antarctica” and that it is the first time that the 20-degree mark has been exceeded.

Last week, OPEC lowered its forecast for crude oil demand due to the corona virus and the associated weaker Chinese economic growth. OPEC assumes that there will be an oversupply of 570,000 barrels per day in the second quarter of 2020. This initially caused crude oil prices to drop further, but a strong technical countermovement prevailed on the market, causing Brent crude oil to close at $ 2.84 a week.

In the course of this, the prices for CO2 certificates also increased significantly and set above the 24-euro mark. This week, the auction of 11.6 million EU emission rights is on the EEX trading calendar, next week it will be 5.3 million more EUA due to the Polish auction.

(Average Quotes Exchange / OTC)
Instrument	07/02/2020	14/02/2020	Change
EUA (Spotmarket)	23.28 EUR	24.24 EUR	+0.96 EUR
EUA (December-2019-Future)	23.34 EUR	24.29 EUR	+0.95 EUR
CER (Spotmarket)	0.21 EUR	0.25 EUR	+0.04 EUR
ICE Brent Crude Oil (Benchmark Future)	54.50 USD	57.34 USD	+2.84 USD
EURO (Currency, Forex)	1.0944 USD	1.0831 USD	-0.0113 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.)

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

With kind regards,

Advantag Services GmbH

Dear Madam or Sir,

The new elections in Great Britain have now accelerated the former “infinite history” of Brexit to the maximum. Last week, the British Parliament approved the Brexit law and there is little doubt that the EU Parliament will shortly agree to the negotiated deal. This would finally put an end to all horror scenarios of an unregulated exit, but by no means all uncertainties have been resolved. Because the exit contract regulates the procedures for the separation, but not the basis for future relationships.

And this also affects the emissions trading system. There are of course working papers on the future direction, but far from a decision as to how the British will proceed with regard to CO2 pricing. Some experts predict a CO2 tax here, but there are also considerations regarding their own British trading system. This could then be linked to the European ETS and / or other systems. However, it is also still possible for Great Britain to remain in the ETS as a non-EU country, either until the end of the third trading period on December 31, 2020, or even, if legal requirements are implemented, even beyond.

With all these considerations in mind, the relevant question is floating around, what will become of the marked British EUAs, which were not auctioned in 2019 due to the risk of an unregulated Brexit. There are an estimated 120 to 150 million EUAs that could possibly still flow into the market. However, there is still no final clarity here. If, for example, they came onto the market in weekly auctions over 2020, that would roughly mean three million certificates per week.

The auction-free winter break began on Tuesday of the last trading week and the market reacted with an extremely significant price increase. From its lowest point on Monday, the price rose unstoppably and, after a short breather on Friday, passed the € 27 mark early this morning.

(Durchschnittliche Börsenkurse / OTC)
Instrument	13/12/19	20/12/19	Veränderung
EUA (Spotmarket)	24.01 EUR	26.58 EUR	+2.57 EUR
EUA (Dezember-2020-Future)	24.02 EUR	26,67 EUR	+2.65 EUR
CER (Spotmarket)	0.20 EUR	0.22 EUR	+0.02 EUR
ICE Brent Crude Oil (Benchmark Future)	64.93 USD	65.13 USD	+0.20 USD
EURO (Currency, Forex)	1.1120 USD	1.1078 USD	-0.0042 USD

(The average market prices and OTC prices show the respective mean of supply and demand of different trading venues for CO2 emission rights. Bid and ask usually deviate from the mean by several cents. Crude oil and euros show closing prices. The CER prices are CP2 -CERs, which can be used within the framework of the EU-ETS. Our market reports are not recommendations for trading emission rights or their derivatives and are for information purposes only. If you no longer wish to receive the newsletter, please send a short message to Sender.) 

Our trader team will be happy to answer any questions you may have.

Sincerely yours, 

Advantag Services GmbH