Category: Carbon Market News

Dear Madam or Sir,

Buildings are responsible for about 40% of global greenhouse gas emissions. In the USA, they also stand for the consumption of 70% of the electricity generated there.

The US billionaire Tom Steyer is now planning to make buildings climate-neutral within three years through his company Galvanize Climate Solutions using renewable energies and modernization measures.

Commenting on this plan, Joseph Sumberg, CEO of Galvanize Real Estate, said: “This is a real estate strategy aimed at decarbonization … Capitalism will look at this successful strategy and replicate it.”

Another example is BlocPower, a New York company backed by the Microsoft Climate Innovation Fund and investment bank Goldman Sachs. The startup recently raised $155 million in investments to perform the energy renovation of green buildings and is now starting over 5,000 homes and buildings.

Of course, American billionaires in particular are not doing this for purely altruistic reasons. Rather, investors see energy-related renovations as a must-have and an important criterion when evaluating real estate. Otherwise, unrenovated existing properties will become distressed objects.

What the Americans are showing us will become more and more important to funds, investment houses and banks worldwide, which means that the real estate industry, as one of the largest emitters, will make a significant contribution to decarbonization.

From 2027, the real estate sector will be integrated into the EU emissions trading system EU ETS, which has already been able to gain experience with Germany’s national emissions trading system nEHS since 2021. Currently, the voices are increasingly moving in the direction of not creating a second EU emissions trading system, but instead mapping the pricing with the normal EU ETS. By then, at the latest, properties that have not been renovated become expensive problem cases.

In the past week, prices for EU emission allowances have continued to move towards the 100-euro-mark as the auction volume is reduced due to the Easter holidays, compliance purchases before the 30/04/2023 be made and crude oil also posted a similar increase.

Technical seen, the next relevant resistance would be at 100 euro and there is currently no reason why this resistance should not be tested.

(Average Quotes Exchange / OTC)
Instrument	31/03/23	06/04/23	Change
EUA (Spot-Market)	90.48 EUR	95.14 EUR	+4.66 EUR
EUA (December-2023-Future)	91.93 EUR	96.66 EUR	+4.73 EUR
VER (Natural Carbon Offsets)	3.39 USD	3.27 USD	-0.12 USD
VER (CORISA eligible Carbon Offsets)	2.07 USD	2.18 USD	+0.11 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	79.87 USD	84.83 USD	+4.96 USD
EURO (Currency, Forex)	1.0841 USD	1.0917 USD	+0.0076 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

Last week, as part of the “Fit for 55” climate package, the EU Parliament and the EU member states agreed to increase the share of renewable energies in the EU from 32% to 42.5% by 2030. The rate is currently around 22%.

In addition, partial targets were agreed for the building, transport and industry sectors in order to advance the integration of renewable energies here as well.

In addition, last week the European Commission outlined the plan to start the early auctioning of EU emission allowances as part of the REPowerEU initiative from July 2023. This so-called “frontloading” should offer 16.5 million more EUAs in the auctions this year.

Analysts had previously speculated that this process could start sooner and assumed a volume of 30-40 million additional EUAs for 2023.

The market took this reduction bullish and reacted visibly positively to it, with the December benchmark contract of the EUAs gaining 4.28% on a weekly closing basis and closing well above the EUR 90 mark again.

In the new trading week, prices could continue to be bullish, as only 7,227,000 EUAs are auctioned on three trading days due to Good Friday. In the next week, due to Easter Monday, a total of 9,433,500 EUAs will be auctioned at the Leipzig EEX on four trading days.

The new auction calendar with the new auction volumes should be published in the coming weeks.

(Average Quotes Exchange / OTC)
Instrument	24/03/23	31/03/23	Change
EUA (Spot-Market)	86.32 EUR	90.48 EUR	+4.16 EUR
EUA (December-2023-Future)	87.65 EUR	91.93 EUR	+4.28 EUR
VER (Natural Carbon Offsets)	3.04 USD	3.39 USD	+0.35 USD
VER (CORISA eligible Carbon Offsets)	2.06 USD	2.07 USD	+0.01 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	74.90 USD	79.87 USD	+4.97 USD
EURO (Currency, Forex)	1.0735 USD	1.0841 USD	+0.0106 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

At the beginning of last week, the Intergovernmental Panel on Climate Change (IPCC) presented its synthesis report, which makes it unmistakably clear that we can hardly achieve the target set in the Paris Climate Protection Agreement of 2015 of limiting global warming to a maximum of 1.5°C compared to the pre-industrial age, since we have already arrived at 1.1°C.

According to the report, around 3.6 billion people already live in regions that will be particularly affected by climate change.

In order to still meet the 1.5°C target, global emissions would have to be reduced by almost half by 2030 compared to 2019, and by 65% until 2035. From today’s perspective, an illusory goal, since emissions have increased significantly again after Corona.

In particular, the Intergovernmental Panel on Climate Change emphasized that the average global surface temperature has never risen as quickly as it has since 1970 for at least 2,000 years. It should be mentioned that the world population has more than doubled since 1970 and an end to the increase is not yet in sight.

The liberal German governing party FDP, on the other hand, is convinced that carbon emissions trading alone will bring about the necessary reduction in greenhouse gases. FDP remains opposed to a speed limit in Germany and has now ensured that Germany is seen as breaking its word at EU level for undermining the 2035 ban on internal combustion engine vehicles. The fact that this looks like clientele politics, since synthetic fuels require a multiple of energy and thus costs for production, seems to be of secondary importance in the party that leads the German Ministry of Finance, which apparently also reflects the damage to Germany’s reputation at EU level applies.

EU emissions trading prices have been very volatile over the past week as fears of another financial crisis persist. The fears are being fuelled in no small part by fears that Deutsche Bank could run into trouble, which could spark a European conflagration.

After the prices of EU emission allowances had been relatively optimistic in the last week until Friday, they collapsed after the EEX auction on Friday, but still showed a small plus on a weekly closing basis.

In the new trading week, a total of 11,842,500 EUAs will be offered on the EEX on all five trading days and it will remain important this week how strong the demand at the auctions will be.

(Average Quotes Exchange / OTC)
Instrument	17/03/23	24/03/23	Change
EUA (Spot-Market)	86.03 EUR	86.32 EUR	+0.29 EUR
EUA (December-2023-Future)	87.29 EUR	87.65 EUR	+0.36 EUR
VER (Natural Carbon Offsets)	3.48 USD	3.04 USD	-0.44 USD
VER (CORISA eligible Carbon Offsets)	2.28 USD	2.06 USD	-0.22 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	72.51 USD	74.90 USD	+2.39 USD
EURO (Currency, Forex)	1.0667 USD	1.0735 USD	+0.0068 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

Last week, the German Federal Environment Agency (UBA) published the preliminary greenhouse gas emission data for the past year. As a result, German emissions fell by 1.9% last year. According to the UBA, a total of 746 million tons of CO2 or its equivalent (CO2e) were emitted. Since 1990, annual emissions in Germany have already fallen by 40.4%.

Due to the increased energy production from coal caused by the Ukraine war, 10.7 million tons more were emitted in this area than in 2021, but the sector target of 257 million tons was just met thanks to the increase in renewable energies and the relatively mild winter.

Unfortunately, the sectors that have been subject to pricing as a result of German national emissions trading since 2021 remain above the target values. The transport and building sectors are again above the annual emission levels specified in the German Federal Climate Protection Act.

In the transport sector, around 1.1 million tonnes more CO2 were emitted than in the previous year, despite record figures for the registration of e-cars. With 148 million tons of CO2, this area is well above the permitted 138.8 million. In the buildings sector, around six million tons or 5.3% less were emitted in 2022, but with 112 million tons of CO2, the buildings were still above the legal limit of 107.4 million.

The share of renewables in gross electricity consumption rose from 41.2% to 46.2%. In the heat sector, the proportion also rose from 15.8% to 17.4% and the total reduction in greenhouse gas emissions in Germany last year through the use of renewable energies amounted to a remarkable 232 million tons of CO2.

In the past week, the market for European carbon emission allowances followed the financial markets and fell across the board. EUAs in the December 2023 benchmark futures contract were just above the €86 mark at last Friday’s low but recovered slightly to close the last week of trading at €87.29, a loss of 12.5% on a weekly closing basis.

The EUAs followed the bank stocks. In the same period, the EURO STOXX Banks Index lost 11.4% amid fears of a new financial crisis after several US banks had to be supported and the Swiss Credit Suisse was saved from bankruptcy with 50 billion. In the meantime, the major Swiss bank UBS has signalled an interest in taking over the ailing Credit Suisse.

Institutional investors such as banks and financial institutions in particular got out of emission rights last week and the spread between the auction results on Friday and the current stock exchange trading was exceptionally high at minus 2.4%.

In this market environment, it is difficult to predict whether it is just a financial crisis “light” or there will be a déjà vu from 2008.

Should things calm down, the EUA could quickly move back above the 90 Euro mark. As long as the financial markets remain nervous, the next technical support would be around the 83 euro area.

The Leipzig energy exchange EEX will auction a total of 9,168,000 EUAs next week and 775,500 emission allowances for aviation (EUAA) on Wednesday. The demand for the auctions in the coming week will remain an important price-influencing factor on the market.

(Average Quotes Exchange / OTC)
Instrument	10/03/23	17/03/23	Change
EUA (Spot-Market)	98.22 EUR	86.03 EUR	-12.19 EUR
EUA (December-2023-Future)	99.80 EUR	87.29 EUR	-12.51 EUR
VER (Natural Carbon Offsets ø)	3.52 USD	3.48 USD	-0.04 USD
VER (CORISA eligible Carbon Offsets  ø)	2.29 USD	2.28 USD	-0.01 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	82.66 USD	72.51 USD	-10.15 USD
EURO (Currency, Forex)	1.0640 USD	1.0667 USD	+0.0027 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

From the beginning of this millennium to 2021, at least 145 billion euros in damage has been caused in connection with climate change, as the German State Secretary for the Environment Christiane Rohleder summed up last week.

The majority of this, amounting to 80 billion euros, only occurred in the four years from 2018 to 2021 and the study puts the damage by the middle of the century at up to 900 billion euros. Added to this is damage that is difficult to measure financially, such as deaths from flooding and heat, as well as severe strain on ecosystems and further loss of biodiversity on our planet.

In order to mitigate this, the climate experts at the German National Academy Leopoldina presented a roadmap last week that is intended to accelerate the path of the economy towards renewable energies. To this end, the scientists have developed six main ideas.

One of the important issues is the completion of the EU emissions trading system EU ETS in the direction of a long-term trading system that includes all emitters as an important control system for compliance with the Paris climate protection agreement negotiated in 2015.

In addition, the technological removal of CO2 from the atmosphere, the expansion of a “green” hydrogen infrastructure, the expansion of digital electricity networks (smart grids), the expansion of renewable energies and a market-compliant and accelerated planning of the energy system conversion are important building blocks in the necessary decarbonization of Europe.

Prices in EU emissions trading system EU ETS have recovered over the past week from the previous week’s profit-taking and buyers have returned, taking the benchmark contract of EU emissions allowances (EUA-Dec-2023) back above 100 euros last Friday – technical driven.

If EUAs sustain above the resistance line of around EUR 100 this trading week, the next key technical resistance would be in the area of just over EUR 105. If this should not succeed, the next relevant support would be in the area around 92 euros.

The Leipzig EEX is auctioning a total of 11,842,500 EUA on all trading days this week. The weekly auctions for German national emission allowances nEZ also take place this Tuesday and Thursday.

(Average Quotes Exchange / OTC)
Instrument	03/03/23	10/03/23	Change
EUA (Spot-Market)	91.04 EUR	98.22 EUR	+7.18 EUR
EUA (December-2023-Future)	92.18 EUR	99.80 EUR	+7.62 EUR
VER (Natural Carbon Offsets ø)	3.45 USD	3.52 USD	+0.07 USD
VER (CORISA eligible Carbon Offsets  ø)	2.55 USD	2.29 USD	-0.26 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	85.98 USD	82.66 USD	-3.32 USD
EURO (Currency, Forex)	1.0636 USD	1.0640 USD	+0.0040 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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