Category: Carbon Market News

Dear Madam or Sir,

Last Wednesday, the EU Parliament met and voted on the proposals for the reform of EU emissions trading system. These were rejected with 340 no and 265 yes votes.

MEP Dr. Peter Liese, who worked out the compromise proposal and brought it to the vote, sees the main blame for this in particular with the social democratic parliamentary group, which was particularly dissatisfied with the timetable for the introduction of the CO2 border taxation and the expiry of the free allocation of CO2 emission rights.

The Greens, on the other hand, found the proposal too softened by the lobbyists of the fossil industry, as MEP Michael Bloss announced.

Now the talks in the Environment Committee regarding the reform of the EU ETS have to start all over again.

The market then reacted with significant losses, but remained stable above the EUR 80 mark towards the end of the trading week.

In the new week, a total of 8,830,500 EUAs and 600,000 emission allowances for the aviation industry (EUAA) will be auctioned at the Leipzig energy exchange EEX.

(Average Quotes Exchange / OTC)
Instrument	03/06/22	10/06/22	Change
EUA (Spot-Market)	88.73 EUR	81.74 EUR	-6.99 EUR
EUA (December-2022-Future)	88.87 EUR	81.86 EUR	-7.01 EUR
VCU (Voluntary Carbon Units ø)	10.85 USD	10.42 USD	-0.43 USD
VER (Gold Standard Spotmarkt ø)	4.98 USD	4.62 USD	-0.36 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	121.69 USD	122.01 USD	+0.32 USD
EURO (Currency, Forex)	1.0562 USD	1.0515 USD	-0.0047 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,

The rapporteur on the European emissions trading system EU ETS and spokesman for the largest group in the European Parliament (EPP, Christian Democrats) Dr Liese presenting an amendment from his group and the liberal Renew Europe group, Peter Liese said: “With our compromise amendment, we give industry and citizens more breathing space in difficult times and avoid a price shock in 2024. At the same time, we achieve even more greenhouse gas reductions than in the Commission proposal. “

However, with a four-vote majority against Liese’s recommendation, the committee approved a significant increase in ambition compared to the European Commission’s proposal. Instead of the Commission’s proposed 61% reduction in greenhouse gas reductions, the committee voted for 67%. In addition, a vote was taken to withdraw around 240 million certificates in 2024. The Renew group has now agreed to a compromise. The one-time reduction is now only to be 70 million in 2024 and a further 50 million emission rights are to be withdrawn from the market in 2026.

By assuming a higher linear reduction factor, according to Dr. Liese the target be changed to 63% by 2030, which is also important and the total emissions between 2024 and 2030 are therefore lower than the Commission proposal and ultimately more ambitious.

In addition, the EPP tabled the following amendments, among others, such as a joint amendment on carbon leakage protection for ports, an amendment on a bonus for sustainable alternative fuels in shipping, an exemption for ships carrying LNG and hydrogen, and one amendment to restrict market access to avoid manipulation and speculation.

In addition, the EPP wants to submit an amendment to all seven Fit-For-55 reports this week in plenary to call for a regulatory moratorium in view of the high energy and commodity prices and the war in Ukraine.

On a weekly basis, EU emissions allowances have risen by 5.5% and are heading back towards the EUR 90 mark, which has been breached several times in the past six months.

This was not least due to the fact that last week, due to the public holidays, a total of only five million EUAs were auctioned at the Leipzig EEX on just two days. Due to Whit Monday, a total of 9.2 million EUAs will only be offered on four days this week.

(Average Quotes Exchange / OTC)
Instrument	27/05/22	02/06/22	Change
EUA (Spot-Market)	84.08 EUR	88.73 EUR	+4.65 EUR
EUA (December-2022-Future)	84.20 EUR	88.87 EUR	+4.67 EUR
VCU (Voluntary Carbon Units ø)	10.76 USD	10.85 USD	+0.09 USD
VER (Gold Standard Spotmarkt ø)	4.73 USD	4.98 USD	+0.25 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	115.08 USD	121.69 USD	+6.61 USD
EURO (Currency, Forex)	1.0732 USD	1.0747 USD	+0.0015 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,

The rapporteur on the European emissions trading system EU ETS and spokesman for the largest group in the European Parliament (EPP, Christian Democrats) Dr Liese presenting an amendment from his group and the liberal Renew Europe group, Peter Liese said: “With our compromise amendment, we give industry and citizens more breathing space in difficult times and avoid a price shock in 2024. At the same time, we achieve even more greenhouse gas reductions than in the Commission proposal. “

However, with a four-vote majority against Liese’s recommendation, the committee approved a significant increase in ambition compared to the European Commission’s proposal. Instead of the Commission’s proposed 61% reduction in greenhouse gas reductions, the committee voted for 67%. In addition, a vote was taken to withdraw around 240 million certificates in 2024. The Renew group has now agreed to a compromise. The one-time reduction is now only to be 70 million in 2024 and a further 50 million emission rights are to be withdrawn from the market in 2026.

By assuming a higher linear reduction factor, according to Dr. Liese the target be changed to 63% by 2030, which is also important and the total emissions between 2024 and 2030 are therefore lower than the Commission proposal and ultimately more ambitious.

In addition, the EPP tabled the following amendments, among others, such as a joint amendment on carbon leakage protection for ports, an amendment on a bonus for sustainable alternative fuels in shipping, an exemption for ships carrying LNG and hydrogen, and one amendment to restrict market access to avoid manipulation and speculation.

In addition, the EPP wants to submit an amendment to all seven Fit-For-55 reports this week in plenary to call for a regulatory moratorium in view of the high energy and commodity prices and the war in Ukraine.

On a weekly basis, EU emissions allowances have risen by 5.5% and are heading back towards the EUR 90 mark, which has been breached several times in the past six months.

This was not least due to the fact that last week, due to the public holidays, a total of only five million EUAs were auctioned at the Leipzig EEX on just two days. Due to Whit Monday, a total of 9.2 million EUAs will only be offered on four days this week.

(Average Quotes Exchange / OTC)
Instrument	27/05/22	02/06/22	Change
EUA (Spot-Market)	84.08 EUR	88.73 EUR	+4.65 EUR
EUA (December-2022-Future)	84.20 EUR	88.87 EUR	+4.67 EUR
VCU (Voluntary Carbon Units ø)	10.76 USD	10.85 USD	+0.09 USD
VER (Gold Standard Spotmarkt ø)	4.73 USD	4.98 USD	+0.25 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	115.08 USD	121.69 USD	+6.61 USD
EURO (Currency, Forex)	1.0732 USD	1.0747 USD	+0.0015 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,

The meeting of the G7 climate protection, energy and environment ministers came to an end last Friday.

One of the most important points here is that the G7 countries have, for the first time, committed themselves to achieving a predominantly decarbonised electricity supply by 2035 and ending coal-fired power generation in the process. Furthermore, direct international public financing of fossil fuels is to be phased out by the end of this year. Inefficient fossil fuel subsidies are to be phased out by 2025, and by 2030 a highly decarbonised transport sector is to prevail in the G7 countries.

Measures to protect species and the sea, against plastic pollution and for resource efficiency were also decided. The main results of the meeting were recorded in a joint communiqué from all G7 countries.

After the price losses of the previous week, the price for European emission allowances has recovered somewhat and there is still hope that the European Commission’s proposal to auction up to an additional 250 million EUAs will not be accepted or will only be accepted in a significantly weaker form.

Because capital, raw material and energy markets live from the trust of market participants in the system, which falters when such serious interventions are carried out. In addition, the possible price loss and the price gains that did not materialize would be responsible for the fact that visibly less revenue would be achieved in the auctions that have already been planned. This will also happen if speculative institutional investors were alienated. For this reason, the EU would be well advised to thoroughly reconsider such thoughts regarding the universal principle of cause and effect.

(Average Quotes Exchange / OTC)
Instrument	20/05/22	27/05/22	Change
EUA (Spot-Market)	80.24 EUR	84.08 EUR	+3.84 EUR
EUA (December-2022-Future)	80.39 EUR	84.20 EUR	+3.81 EUR
VCU (Voluntary Carbon Units ø)	10.53 USD	10.76 USD	+0.23 USD
VER (Gold Standard Spotmarkt ø)	4.73 USD	4.73 USD	+0.00 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	112.87 USD	115.08 USD	+2.21 USD
EURO (Currency, Forex)	1.0562 USD	1.0732 USD	+0.0170 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 Environment Committee (ENVI) of the EU Parliament met as part of the “Fit for 55” climate package. The ENVI had the reform proposals of the European Commission with regard to the EU Emissions Trading (EU ETS) and in some cases tightened them up.

Important key points are now that the affected sectors of the EU ETS reduce their emissions by 67% by the end of the decade. In addition, the European Commission was asked to draw up a proposal that would include all economic sectors in CO2 pricing by 2030. In addition, the linear reduction factor for CO2 emission allowances is to be raised from the current 2.4% to 4.2% per year and increased by an additional 0.1% per year.

Regarding the free allocation of emission rights for energy-intensive industries, it was proposed to reduce them to 90% in 2025, 80% in 2026, 70% in 2027, 50% in 2028, 25% in 2029 and 0% in 2030.

However, the new emissions trading system for the transport and building sectors in particular was controversial and the final compromise proposal is that private vehicle refueling and heating of private residential properties with fossil fuels should only be included from 2029 and prices should be capped at 50 euros.

Furthermore, shipping is to be included in the EU ETS as early as 2024 and waste incineration from 2026.

As seen by the 9% fall in EU emissions allowances over the past trading week, the announcement that the EU is selling more than 200 million Market Stability Reserve (MSR) allowances to raise funds for its Energy Transition Initiative and the to accelerate the move away from Russian energy sources.

Now the whole package will go into the trilogy negotiations in the coming month, where cutbacks will probably have to be accepted at the end of every point. But the bottom line will be a significant strengthening of the ETS and prices could rise above the 100 euro mark. The additional auction of certificates from the MSR is also correct, because the money is urgently needed. In return, the annual reduction factor is likely to increase to 3-4% and the free allocations will be phased out.

(Average Quotes Exchange / OTC)
Instrument	13/05/22	20/05/22	Change
EUA (Spot-Market)	88.36 EUR	80.24 EUR	-8.12 EUR
EUA (December-2022-Future)	88.48 EUR	80.39 EUR	-8.09 EUR
VCU (Voluntary Carbon Units ø)	10.43 USD	10.53 USD	+0.10 USD
VER (Gold Standard Spotmarkt ø)	4.92 USD	4.73 USD	-0.19 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	111.50 USD	112.87 USD	+1.37 USD
EURO (Currency, Forex)	1.0413 USD	1.0562 USD	+0.0149 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