Category: General

Ladies and gentlemen,

Last Tuesday, a group of Eastern European EU member states called for the entry into force of the EU ETS 2 for the buildings and transport sector to be postponed, as they fear social and economic consequences.

The politicians led by Czech Environment Minister Petr Hladik (EPP) expect petrol and diesel prices to rise by several dozen cents when it comes into force at the beginning of 2027.

The Alliance argues that a postponement by one year to 2028 would lead to greater acceptance and could also reduce market volatility, which would mean a reduction in the social impact. Some countries are even calling for a three-year postponement.

The market stability reserve, which would be used if prices were too volatile, should also be worth discussing.

In addition to the Czech Republic, Italy, Slovakia and Latvia are said to be open to such plans and France has also declared partial flexibility in this regard.

However, the EU Commission clearly spoke out against changes.

Last week, the previous benchmark contract for EUA December 2024 futures expired and the December 2025 contract has now taken over its function.

After prices trended significantly southwards on the first two trading days of last week, this trend came to a halt on Wednesday and, under the support of bullish gas prices, EUAs rose significantly on the last two trading days, closing the week with a price gain of 2.6%.

Interestingly, the support line at just under EUR 65 held and the 200-day line is now the next resistance level, currently at EUR 69.01.

As there will be no auctions in the EU ETS on the Leipzig EEX until January 16, 2025, pricing will now be determined entirely by fundamental news, the market environment and chart technology.

In addition, it has often been the case in recent years that institutional investors are still buying, which would give prices a bullish impetus.

(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,

In January of this year, the Carbon Border Adjustment Mechanism (CBAM) began and importers of goods such as aluminium, iron, steel, cement, fertilisers, hydrogen or electricity, as well as their primary products, into the European Union are obliged to provide quarterly information on the related greenhouse gas emissions to the European Commission.

From January of next year, the companies concerned will be subject to additional registration requirements. Should obligated companies fail to comply with this requirement, they risk no longer being able to import goods into the EU.

It will become financially significant from January 2026, when importers will have to participate in the EU Emissions Trading System (EU ETS) and purchase emission rights for their imports.

However, the North Rhine-Westphalian Ministry of Economic Affairs, headed by Minister of Economic Affairs Mona Neubaur, does not yet consider the current regulations to be sufficient and points out some design flaws. For example, the ministry considers the administrative burden on companies to be too high, which affected companies certainly see it the same way.

Furthermore, there is no compensation for European exporters who participate in the EU ETS and purchase rights for their emissions, but have to compete on the global market with companies that are not subject to any or much lower carbon pricing.

For example, an EU emission allowance for one tonne of CO2 currently costs more than 62 euros, whereas in China it costs just over 13 euros. In China, only the energy industry is required to pay the levy, but this is set to change soon.

Furthermore, German North Rhine-Westphalia is calling on the EU to extend the levy to goods containing iron, steel or aluminium, such as brake discs, grills, washing machines and cars.

Last week, prices for EU emission rights were 3.6% lower than in the previous week. A sustained break-through attempt above the 200-day moving average, which is currently at 64.95, failed on Wednesday.

One bearish factor was oil, which saw a price slump last week, coinciding with news that Israel would probably not attack Iranian oil refineries and storage facilities after all, causing Brent crude to slump by 7.5% on a weekly closing price basis.

This week, 14,582,500 EUA will be auctioned on the European Energy Exchange on all five trading days, which corresponds to an increase of 13.8 per cent compared to the previous week.

(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