Category: Carbon Market News

Dear Ladies and Gentlemen,

Unfortunately, 2021 will once again make it into the top 10 of the hottest years since weather data began to be recorded. According to projections, the uninterrupted series of record years that began in 2015 will continue again this year. Which place it will take in this inglorious ranking is beside the point. Regionally, numerous climate records were indeed broken again in 2021. According to calculations, land temperatures in the northern hemisphere were on average higher in autumn than ever before and the Arctic continues to warm more than twice as fast as the rest of the world.

In this context, the latest press release of the German Federal Environment Agency is alarming, which states that the share of renewable energies in total electricity consumption will decrease noticeably in 2021 and, after 45.3 percent in 2020, will only reach the level of 2019 with about 42 percent. While total electricity consumption increased, five percent less electricity was generated from renewable sources than in the previous year due to weather conditions. The statement went on to say that renewable electricity production has risen continuously since 1997. So far, individual years with less wind and sun have mostly been compensated for by the addition of new power generation plants. However, this was not the case in 2021, also because only little capacity was added in 2019 and 2020.

This closely follows last Friday’s report by the International Energy Agency (IEA) that global electricity generation from coal will reach an all-time high again this year. The reason for this is the global economic recovery, which is increasing demand for electricity faster than low-carbon energy sources can keep up.

The carbon market first did not find any new orientation last week and so prices moved relatively steadily sideways in a range between 80 and 85 euros. However, this changed on Friday. At the start of trading, the EUA’s initially moved significantly upwards, before they then suffered the biggest daily decline in euros ever. Apparently, despite immediate denials, traders had been spooked in part by the threat of intervention and realised their profits in the run-up to the reference futures contract expiring today. In the process, the price of the EUA’s fell by around EUR 11.50.

(Average Quotes Exchange / OTC)
Instrument	10/12/21	17/12/21	Change
EUA (Spot-Market)	83.73 EUR	73.28 EUR	-10.45 EUR
EUA (December-2021-Future)	83.73 EUR	73.28 EUR	-10.45 EUR
VCU (Voluntary Carbon Units ø)	8.86 USD	7.98 USD	-0.88 USD
VER (Gold Standard Spotmarkt ø)	8.67 USD	8.53 USD	-0.14 USD
nEZ (German National Carbon Units)	25.00 EUR	25.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	75,30 USD	73.08 USD	-2.22 USD
EURO (Currency, Forex)	1.1316 USD	1.1237 USD	-0.0079 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. VCUs and VERs are average prices (CBL markets). 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 Ladies and Gentlemen,

In the last week of trading, the European carbon emission allowances reached a new all-time high of 90.75 euros per EUA amid high volatility, were unable to keep the level above the 90s and closed at 88.88. The expected market correction then came on Thursday, with prices falling by 10%. However, Friday was again shaped by the bulls, so that the trading week closed with a significant plus of 7%.

The reasons for the recent price explosion were manifold: Germany has established a new federal government under Chancellor Olaf Scholz (SPD), in which the Greens have received important posts such as the newly formed Ministry for Economic Affairs and Climate Protection as well as the Foreign Ministry and the Ministry of Agriculture. On the other hand, the oil price rose despite higher production volumes agreed by the OPEC, as various delivery bottlenecks were emerging, which brought Brent Crude Oil an increase of 7.6% on a weekly basis.

This week begins the last full week in which a total of 11,428,000 EUA are auctioned on the Leipzig EEX. The last auction of the year with 2,542,500 EUAs will take place on Monday, December 20th, 2021, before a three-week break begins.

Insofar as there is additional bullish news in the market environment, speculatively oriented market participants could see this as a reason to move the market towards the 100 mark again with regard to the auction break. Since many institutional investors are still involved, it remains to be seen whether they want to realize more profit-taking towards the end of the year or whether they are more interested in a high valuation of the holdings as of December 31, 2021. Today, however, the EUA are optimistic with a plus of more than 2%.

This week the last fixed price auctions in Germany’s national emissions trading system (nEHS) will take place at a fixed price of 25.00 euros per ton of CO2e, on Tuesday and Thursday.

In the coming year one can only buy a maximum of 10% of the certificates acquired this year in the nEHS via the fixed price auctions at a price of 25.00 euros. If you haven’t stocked up enough for 2021, we are at your disposal.

(Average Quotes Exchange / OTC)
Instrument	03/12/21	10/12/21	Change
EUA (Spot-Market)	78.23 EUR	83.73 EUR	+5.50 EUR
EUA (December-2021-Future)	78.25 EUR	83.73 EUR	+5.48 EUR
VCU (Voluntary Carbon Units ø)	7.56 USD	8.86 USD	+1.30 USD
VER (Gold Standard Spotmarkt ø)	8.92 USD	8.67 USD	-0.25 USD
nEZ (German National Carbon Units)	25.00 EUR	25.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	70.01 USD	75,30 USD	+5,29 USD
EURO (Currency, Forex)	1.1312 USD	1.1316 USD	+0.0004 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. VCUs and VERs are average prices (CBL markets). 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,

In one of the countless TV discussions on the current handling of the Corona pandemic, a participant expressed herself with disarming logic. She began by emphasising how important and correct the demands were that all people must now join forces to oppose any further spread of the virus. But then she added that we must also oppose global warming with the same determination and with immediate, courageous measures. There should be no distinction in importance and urgency.

In this context, the magazine “WirtschaftsWoche” reported last weekend on an agreement between the coalition partners to also abandon gas as an energy source in Germany by 2045 at the latest. After the phase-out of nuclear energy and coal, the renunciation of gas firing, which is seen as a bridging technology, would mean a great challenge for the economy and property owners. However, the CO2 targets in Germany could not be achieved otherwise, coalition circles said. In the spirit of courageous and determined action, it would now be desirable for the industry to look for alternatives with all the means at its disposal instead of reflexively taking a defensive stance.

In the meantime, the carbon market has staged a fulminant rally, breaking through technical resistances that only a short time ago had the sound of dreams of the future. In today’s early trading, the price even exceeded the 70-euro mark, which is significant both from a chart-technical and a market-psychological point of view.

In national emissions trading, the Leipzig energy exchange EEX, in coordination with the German Energy Agency, has announced three additional sales dates for this year, namely for the 9th, 14th and 16th of December. These additional dates have become necessary because apparently far too few companies have taken care of the procurement of the national emission allowances so far for the purchases to be processed in time. This concession is intended to prevent companies from purchasing allowances in the coming year in order to fulfil their obligation to surrender in 2021, as these will then automatically cost 30 euros instead of the previous 25 euros. As a member of the EEX, we will be happy to assist you as an intermediary in the timely procurement.

(Average Quotes Exchange / OTC)
Instrument	12/11/21	19/11/21	Change
EUA (Spot-Market)	59.38 EUR	69.36 EUR	+6.09 EUR
EUA (December-2021-Future)	59.39 EUR	69.36 EUR	+6.09 EUR
CER (Voluntary Spot-Market ø)	4.78 USD	4.78 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	13.69 USD	13.69 USD	+0.00 USD
ICE Brent Crude Oil (Benchmark Future)	82.26 USD	78.43 USD	-3.63 USD
EURO (Currency, Forex)	1.1569 USD	1.1282 USD	-0.0197 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. CERs and VERs are average prices in the voluntary carbon offsetting market (eco securities). 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 26th World Climate Conference in Glasgow came to an end on Saturday after prolongation.

This time, as expected, only resolutions were passed, the content of which could be supported by all participating states, which is the ultimate problem of such conferences.

On Saturday, a final declaration was drawn up, which all states have signed up to. In particular, the focus was on phasing out energy generation from coal. A special request was made to abolish the inefficient subsidies for fossil fuels. The aim is to create a new economic model and to achieve the Paris goal of increasing global warming by a maximum of 1.5°C.

Experts and climate protectors are extremely skeptical of this and see a warming of 2.4°C by the end of the century as much more realistic if the current timetable is adhered to.

In addition to phasing out coal, other focal points were higher climate targets and financial support for developing countries. In addition, it was decided to help the developing countries, which are hardest hit, with adaptation.

Germany has also joined the “Global Methane Pledge” and is committed to reducing methane gas emissions, which are particularly relevant for the climate in the short term, by 30% by the end of the decade.

Last but not least, 24 states and several car manufacturers have decided not to sell any cars with internal combustion engines from 2040, in the leading sales markets even from 2035. Germany is not one of them and if there is no radical rethinking here in the coming years, the car manufacturers who continue to rely on the internal combustion engine will face fundamental existential problems.

It remains to be seen whether the international community of almost 200 participating states will actually manage to implement the measures on its own. However, this will only happen by channeling the flow of money in the direction of decarbonization and high prices for greenhouse gas emissions, but it will only be successful if social aspects are taken into account.

In the past week, the technicians in the market for EU emission rights prevailed again and let the price rise by almost four percent on the basis of the weekly closing price.

In addition to the coming Tuesday and Thursday, another five fixed price auctions will take place on the EEX at an issue price of 25 euros in German national emissions trading system. So if you are one of the distributors of fossil fuels in Germany, you should hurry now, because they can only make purchases on the Leipzig Energy Exchange until December 7th, 2021 at the latest.

We would be happy to assist you and, as a member of EEX, procure the required number of national emission certificates (NEZ) for you safely and conveniently.

(Average Quotes Exchange / OTC)
Instrument	05/11/21	12/11/21	Change
EUA (Spot-Market)	59.38 EUR	63.27 EUR	+3.89 EUR
EUA (December-2021-Future)	59.39 EUR	63.27 EUR	+3.88 EUR
CER (Voluntary Spot-Market ø)	4.78 USD	4.78 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	13.69 USD	13.69 USD	+0.00 USD
ICE Brent Crude Oil (Benchmark Future)	82.26 USD	82.06 USD	-0.20 USD
EURO (Currency, Forex)	1.1569 USD	1.1479 USD	-0.0090 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. CERs and VERs are average prices in the voluntary carbon offsetting market (eco securities). 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 first week of the World Climate Conference in Glasgow (COP26) is over and, as usual, opinions on what has been achieved so far are widely divided. A decision to limit methane emissions and a declaration on halting deforestation are among the notable highlights of the negotiations so far. Climate experts around the world never get tired of calculating how the announcements and adjustments made so far would affect the achievement of the Paris climate goals if strictly implemented. In this context, the International Energy Agency (ETA) and the University of Melbourne, for example, see some light at the end of the tunnel, as they all agree that the temperature increase should be limited to less than two degrees.

Of course, these are forecasts based on declarations of intent. It was, after all, an essential part of the Paris Agreement that nations should be allowed to decide for themselves what they approve and when they implement it to contribute their share to the goals. They now seem to be within reach, but what is decisive is the actual effort to finally reach the end of the tunnel.

Hardly any other issue illustrates this as clearly as the phase-out of coal production. In the public perception, this seems to be a kind of currency by which one can read off what progress is being made. This is certainly neither right nor fair, but it makes obvious that explanations and decision-making aids are urgently needed for a topic that is also historically so incredibly complex.

At the beginning of the last trading week, after a longer, stable sideways movement, there was again a significant correction on the carbon market. Important technical signals were broken through, but the downward trend was stopped at the 57-euro mark. The second half of the week was then marked by a nervous battle for the 60-euro line. This resulted in a slight plus on a weekly basis.

(Average Quotes Exchange / OTC)
Instrument	29/10/21	05/11/21	Change
EUA (Spot-Market)	58.69 EUR	59.38 EUR	+0.69 EUR
EUA (December-2021-Future)	58.71 EUR	59.39 EUR	+0.68 EUR
CER (Voluntary Spot-Market ø)	4.78 USD	4.78 USD	+0.00 USD
VER (Gold Standard Spotmarkt ø)	13.69 USD	13.69 USD	+0.00 USD
ICE Brent Crude Oil (Benchmark Future)	83.69 USD	82.26 USD	-1.43 USD
EURO (Currency, Forex)	1.1561 USD	1.1569 USD	+0.0008 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. CERs and VERs are average prices in the voluntary carbon offsetting market (eco securities). 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