Emissions Trading / Carbon Market News (18/03/2024)

Dear Madam or Sir,

Last week, the German Economics and Climate Minister Robert Habeck presented Germany’s figures for greenhouse gas emissions last year.

According to these figures, a total of 10.1% or 76 million tonnes of CO2e less was emitted in 2023 in Germany than in the previous year, which is the sharpest decline since 1990. However, the transport sector is still 13 million tonnes above the target value, which is why the Federal Environment Agency sees an urgent need for action here, even though there was a reduction of 1.2% compared to the previous year.

The building sector, which is also priced in national emissions trading alongside transport, recorded a decrease of 7.5% or 8.3 million tonnes of CO2. However, the mild winter temperatures are partly responsible for this.

The energy sector has made good progress here, having emitted just under 52 million tonnes less thanks to the expansion of renewable energies and is therefore responsible for the lion’s share of the greenhouse gas reduction.

Industry also emitted 13 million tonnes of CO2 or almost 8% less. This means that emissions fell for the second year in a row, although this is largely due to the weakening economy in Germany.

For the third week in a row, prices for EU emission allowances have risen slightly compared to the previous week and are only just below the 60 euro mark, which was briefly exceeded on Friday.

Even if some readers consider the current prices to be far too low, pricing via the market is a great thing and is proving its advantage over a fixed tax on greenhouse gas emissions, especially at the present time, by relieving the economy and consumers in difficult times, as shown by falling inflation.

A total of 12,005,500 EU emission allowances will be auctioned this week, including 906,000 allowances for aviation on Wednesday. However, these can also be used for stationary installations. Compared to the previous week, the auction volume has therefore fallen by 10.4%.

    (Average Quotes Exchange / OTC)       
Instrument08/03/2415/03/24Change
EUA (December-2024-Future)58.39 EUR59.39 EUR+1.00 EUR
VER (Natural Carbon Offsets)1.37 USD1.22 USD-0.15 USD
VER (CORSIA eligible Carbon Offsets)0.46 USD0.42 USD-0.04 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)81.64 USD84.89 USD+3.25 USD
EURO (Currency, Forex)1.0946 USD1.0887 USD-0.0059 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 (11/03/2024)

Dear Madam or Sir,

Last week, the German Federal Environment Agency presented the figures for the energy sector in Germany in 2023.

The share of renewable energies in gross electricity consumption has risen from 46.2% to 51.8%. Good wind conditions and more than one million new photovoltaic systems have contributed to this.

In the heating sector, renewables also increased slightly from 17.5% to 18.8% to 205 TWh.

Due to the increase in green electricity in the electricity mix and the growth in electromobility, renewables in the transport sector increased from 6.9% to 7.3%.

This means that in 2023, renewable energies in Germany emitted 250 million tonnes less CO2, which corresponds to an increase of 15 million tonnes compared to the previous year.

Conversely, this means that 15 million fewer EUAs or national emission allowances were also required, which should have a rather bearish effect in the area of EU ETS emissions trading.

Compared to the previous week, however, EUAs rose for the second week in a row, this time by 3.6%. On Tuesday, the December future broke through the EUR 60 mark and reached a weekly high of EUR 62.80 per EUA on Wednesday. However, the emission allowances then repeatedly bounced off the 38-day line and then moved back down from the 60 area.

Due to a lack of fundamental data, the price trends for emission allowances are still largely determined by technical factors. EUAs have currently broken out of the downward trend channel that has persisted since November 2023, the upper line of which could now serve as support. Should the buyers side remain active and sustainably break through the 38-day line, which currently stands at EUR 60.82, the next technical resistance level will be around EUR 63.50.

    (Average Quotes Exchange / OTC)       
Instrument01/03/2408/03/24Change
EUA (December-2024-Future)56.37 EUR58.39 EUR+2.02 EUR
VER (Natural Carbon Offsets)1.53 USD1.37 USD-0.16 USD
VER (CORSIA eligible Carbon Offsets)0.83 USD0.46 USD-0.37 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)83.20 USD81.64 USD-1.56 USD
EURO (Currency, Forex)1.0837 USD1.0946 USD+0.0109 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 (04/03/2024)

Dear Madam or Sir,

Last week, the German Federal Minister of Economics, Robert Habeck, gave the green light for the capture and storage of CO2 from industrial processes (carbon capture and storage) at sea. The relevant laws are now to be drafted. If the technology really is sufficiently safe, as Habeck stated, this would be a way to significantly reduce CO2 emissions from industry in Germany. Funding could therefore be possible based on the cost savings for emission allowances alone, but here too the government is required to help the technology and the associated infrastructure achieve a breakthrough in the coming years.

Norway has been leading the way here for some time now and has already done some pioneering work.

Despite the mild temperatures in Central Europe, prices for EU emission allowances rose by 8% last week. The trading range of the December 2024 EUA futures moved within a range of EUR 51.55 – 58.88 and thus roughly marked the lower and upper end of a downward trend channel that began in mid-November.

Should this be broken upwards, the next technical resistance in the coming week will be around EUR 62, but the aforementioned trend channel is relatively pronounced, which is why it would need further cause to break upwards.

A total of 11,094,500 EUAs will be auctioned on the European Energy Exchange this week; the Polish auction will not take place on Wednesday as scheduled.

In addition, the first auctions for 2024 German national emission allowances will take place on Tuesday and Thursday with unlimited auction volumes.

Likewise, from this week onwards, additional purchases for 2023 nEZ can be procured on the EEX, but only 10% of the quantity already auctioned in 2023.

We will be happy to answer any questions you may have in this regard.

    (Average Quotes Exchange / OTC)       
Instrument23/02/2401/03/24Change
EUA (December-2024-Future)52.22 EUR56.37 EUR+4.15 EUR
VER (Natural Carbon Offsets)1.51 USD1.53 USD+0.02 USD
VER (CORSIA eligible Carbon Offsets)0.84 USD0.83 USD-0.01 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)80.95 USD83.20 USD+2.25 USD
EURO (Currency, Forex)1.0817 USD1.0837 USD+0.0020 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 (26/02/2024)

Dear Madam or Sir,

In 2023, the 1.5°C target of the Paris Climate Change Conference was broken and January 2024 was also the warmest January ever on record.

Even if some of the current warming can be attributed to the El Niño phenomenon, which began in the summer of 2023, the deviation from the average temperature is striking and it is currently not foreseeable that there will be a reduction in the global temperature rise.

And in the summer of 2024, La Niña appears to directly follow El Niño, with a stronger trade wind from South America towards the equator pushing the warm surface water further west towards Australia and Southeast Asia. This causes more cold water to rise from the depths in the south-east Pacific. As a result, there will be droughts in South America and significantly more precipitation in South-East Asia and Australia.

Even if it sounds far away, the change from El Niño to La Niña can also have an impact in Europe in the form of extreme weather events, which are favoured by the significantly higher average temperature.

In order to mitigate further global warming, it is important to have a functioning emissions trading system that is well controlled by high prices.

However, prices in EU emissions trading continued their bearish trend last week and headed south towards the EUR 50 mark. The persistent weather, which is clearly too mild for the time of year in Europa, and the associated reduction in the use of fossil fuels have further reduced demand and caused the price to slump by a further 8.7% at the end of the week.

As temperatures are also expected to remain relatively mild in the coming days, a counter-reaction can only be expected if there are unforeseen bullish impulses and the buying side becomes more visible.

    (Average Quotes Exchange / OTC)       
Instrument16/02/2423/02/24Change
EUA (December-2024-Future)57.17 EUR52.22 EUR-4.95 EUR
VER (Natural Carbon Offsets)1.50 USD1.51 USD+0.01 USD
VER (CORSIA eligible Carbon Offsets)0.76 USD0.84 USD+0.08 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)82.75 USD80.95 USD-1.80 USD
EURO (Currency, Forex)1.0775 USD1.0817 USD+0.0042 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 (19/02/2024)

Dear Madam or Sir,

Last week, the EU decided to support CO2-intensive industry, which is subject to levies in EU emissions trading EU ETS, with a total of four billion euros to reduce 60% of its carbon emissions within three years and 90% within 15 years. 

In addition, the German Federal Ministry of Economics has announced that Germany intends to have the EU emission allowances that are no longer needed due to the coal phase-out cancelled and therefore not transferred to the Market Stability Reserve (MSR). This would possibly have happened indirectly anyway, as the MSR will retire all allowances above its maximum quantity of 400 million EUAs from this year onwards. The exact amount is not yet known.

EU emission allowances have lost almost 30% since the beginning of this year, carbon credits used for the international aviation industry (CORSIA) have gained 29% after months of decline and voluntary carbon credits based on nature projects also appear to have bottomed out with an increase of 65%.

According to various analysts, the prices of voluntary emissions trading certificates will rise by several hundred and even thousand per cent in the coming years, which is why many funds and investors are already beginning to discover this asset class for themselves. However, good advice on which types of certificates could be among the most promising is essential here.

At the end of the week, EU emission allowances were relatively stable compared to previous weeks, falling by only 2.8%. The trading range of the December 2024 EUA futures was not particularly volatile either, with prices ranging between 55.41 and 59.05 Euro.

From a technical point of view, it would now be logical for the EUA to tackle the path above the EUR 60 mark this week, but in the absence of bullish impetus, a further decline could also be possible; after all, the delivery deadline has now been moved from the end of April to the end of September, which makes the usual bullish phase in the first quarter obsolete due to higher demand.

    (Average Quotes Exchange / OTC)       
Instrument09/02/2416/02/24Change
EUA (December-2024-Future)58.79 EUR57.17 EUR-1.62 EUR
VER (Natural Carbon Offsets)1.42 USD1.50 USD+0.08 USD
VER (CORSIA eligible Carbon Offsets)0.78 USD0.76 USD-0.02 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)81.67 USD82.75 USD+1.08 USD
EURO (Currency, Forex)1.0782 USD1.0775 USD-0.0007 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