Category: Carbon Market News

Dear Sir or Madam,

In a recent study, the University of Hamburg (UHH) has analysed the indirect effects of the EU Emissions Trading System on hazardous air pollutants. The findings of the Cluster of Excellence “Climate, Climatic Change and Society” (CLICCS) show that the European Emissions Trading System has both climatic and significant health benefits, while also saving billions in costs.

Since the introduction of emissions trading, 15 million tonnes of sulphur dioxide, one million tonnes of particulate matter and five million tonnes of nitrogen oxides have been reduced in the obligated sectors by 2021. The improved health situation creates an important additional incentive to support climate policy, as the University of Hamburg was able to show avoided health damage totalling more than 100 billion euros on the basis of official cost rates from the German Federal Environment Agency.

Prices in EU emissions trading moved sideways downwards again in the past trading week and closed exactly one cent below the 200-day line on Friday, which stands at EUR 69.20.

It will be interesting to see in the coming weeks when compliance buyers in the EU ETS will start to procure the volumes they have not yet purchased for 2023 on the market.

This week, a total of 13,404,500 EUAs will be auctioned on the EEX on all five trading days and it remains to be seen whether the price will manage to break through the 100-day line on a sustained basis.

(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

Dear Sir or Madam,

The effectiveness of EU emissions trading is repeatedly the subject of controversial debate. A current study now shows what the introduction of certificates since 2005 has achieved in various areas.

According to researchers from the Cluster of Excellence Climate, Climatic Change, and Society at the University of Hamburg, climate protection in the European Union has also directly benefited health. For example, emissions trading and the simultaneous tightening of air pollution control standards for large combustion plants in the EU have led to a drop in sulphur dioxide (by 39 per cent), particulate matter (by 28 per cent) and nitrogen oxides (by 14 per cent) in the air between 2005 and 2021.

The study thus shows that EU emissions trading is not only an effective instrument for reducing carbon emissions, but also offers significant additional benefits through the reduction of air pollutants. “The estimated health benefits could be equivalent to hundreds of billions of euros, even when the effects of simultaneously improved emission standards are taken into account,” explain the researchers.

A comprehensive policy assessment should therefore also take into account the additional benefits that go beyond CO2 reduction, such as reduced health damage from improved air quality. Communicating these benefits could help to increase public support for climate policy measures, as these additional benefits directly affect citizens and can be realised within Europe.

The past trading week began rather cautiously for the carbon market, which initially depressed prices. On Tuesday, however, the buy side took the initiative and invested a lot of money. As a result, the carbon price initially broke through the 70 euro mark without resistance and briefly rose to the 72 euro line on Wednesday. However, the publication of the Commitments of Traders Report (CoT Report) caused speculators to switch back to the more pessimistic side. The net short position rose again, whereupon the market followed the investment funds and finally levelled out in a range between 70 and 71 euros.

Thursday was an exciting day for the market as elections were held in the UK. The long-standing Conservative Tory government was voted out in a landslide, and the Labour government under Prime Minister Keir Starmer is now in power. The new British Foreign Secretary David Lammy has already spoken of a new beginning in relations with Europe. While the Conservatives have weakened climate protection in recent years, Labour stands for a more consistent climate protection policy. In the UK, developments on this issue therefore appear to be moving in a different direction to those within the EU.

The carbon market initially reacted very positively to the elections and pushed the price back above the EUR 71 mark, but then consolidated lower and closed at EUR 70.36 for the December future.

(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

Ladies and Gentlemen,

The building sector is responsible for around 40% of global CO2 emissions.

S&B Strategy, a Munich-based strategy consultancy specialising in the construction sector, has published a new study that focuses on the goal of climate neutrality in the building sector by 2050.

According to the analysts, there are two ways to reduce CO2 emissions in this segment. The first option is to manage buildings using purely renewable energy, while the second option aims to increase the efficiency of buildings and thus minimise energy loss.

Here, the specialists at S&B consider the heating, roof, facade and window systems to be the most effective for achieving measurable results. As Germany is pursuing both options, climate neutrality cannot be realised without comprehensive building renovations. The analyses show that this will require investments of at least 1,200 billion euros, which, however, are not the key success factor under the current framework conditions.

Due to the shortage of skilled workers and personnel, S&B considers it imperative to improve efficiency in the construction sector in order to significantly improve the performance of existing human resources through prefabrication and standardisation.

This will ultimately also reduce the rising cost of CO2 emission allowances for fossil fuels in the building sector, which will make a significant contribution to financing.

Despite several attempts, carbon emission allowances in EU Emissions Trading System have not realized to break through the 200-day line, which currently stands at EUR 70.56, on a daily closing price basis, which is why the benchmark December 2024 contract closed down a small 15 cents on a weekly basis at EUR 68.13 per tonne of CO2.

In the new trading week, 11,094,500 new EUAs will be auctioned on only four auction days, as the Polish auction will not take place on Wednesday as scheduled.

(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

Ladies and gentlemen,

Companies that are subject to the European Emissions Trading System (EU ETS) will be confronted with stricter conditions in the coming years. Both for existing installations and for companies that were/will be commissioned after 1 January 2023 or will be subject to the EU ETS 1 regulations from 1 January 2024 as a result of the amendment to the Emissions Trading Directive, the free allocations will be significantly reduced. New applications therefore had to be submitted for the so-called 2nd allocation period (2026-2030) within the fourth trading period. The German Emissions Trading Authority (DEHSt) would like to point out that the application deadline for all companies subject to emissions trading ends uniformly on Friday, 21 June 2024. Detailed information and explanations on the allocation rules and the application process can be found on the DEHSt website and in the relevant DEHSt guidelines.

On Monday of the last trading week, the carbon price initially fell to a daily low of slightly over 69 euro, its lowest level in almost a month. This drop is partly due to the results of the European elections, in which parties with less ambitious climate policy goals were able to make gains. The new formation of the European Parliament is expected to influence future climate and energy policy. Somewhat surprisingly, however, buying interest increased again in the afternoon, with the December contract closing at EUR 70.91.

The bulls then dominated the market until Thursday and the price tested the 72 euro mark several times until the bears took over again in the last few trading hours and the price fell back to the 70.50-euro range. Obviously, the financially strong players do not currently trust the CO2 certificate to jump above the 80-euro mark. The next Commitment of Traders report, which will be published on 19 June, is therefore eagerly awaited. The CoT report regularly analyses the trading activities of the major market participants, who generally have the most comprehensive market information, so that conclusions can be drawn about possible market movements from their actions.

On Friday of the past trading week, the downward trend from Thursday continued consistently and drove the price down to a six-week low and thus below the relevant support lines, which suggests that the negative trend will continue in the new trading week. This is all the more true as DEHSt has announced that the free allocation for the year 2024 will take place in June.

(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