Category: Carbon Market News

Dear Sir or Madam,

Last week, too, climate protection had a high priority in Germany’s political landscape. After the groundbreaking ruling by the Federal Constitutional Court the week before, politicians in the election year 2021 have now recognized that the issue can no longer be overlooked. New legislative proposals were promptly made, with the 11th Petersberg Climate Dialogue, which this year took place virtually in an environmentally friendly manner, also provided a corresponding stage on which ministers from 40 countries met. Chancellor Angela Merkel, British Prime Minister Boris Johnson and UN Secretary General Antonio Guterres also attended the meeting.

It ended on Friday with the call to make this year’s world climate conference COP 26 in Glasgow a success and to finally resolve all open points of the regulations under the Paris Agreement.

Federal Chancellor Dr. Angela Merkel stated that Germany should tighten its climate target for 2030 to a CO2 reduction of 65 percent and achieve greenhouse gas neutrality in 2045, which emerges from the draft for a new climate protection law, the key points of which the German Federal Environment Minister Schulze had presented shortly before. Merkel particularly emphasized that she sees global pricing of greenhouse gas emissions as an important step in the fight against climate change. And the host Boris Johnson sees climate protection as a kick start for a new industrial revolution; Great Britain has also tightened its climate targets significantly.

Ultimately, that will mean that greenhouse gas emission prices could hit triple digits in the not too distant future. European Commission Vice President Frans Timmermans on Friday downplayed the prospect that regulators might intervene on the bullish price of European emission allowances, saying that EUAs should trade even higher amid the bloc’s stricter emissions target for 2030.

This got the bulls going again and set a new all-time high at EUR 51.10 per EUA on the last trading day of the week, ignoring the fact that the 2020 compliance period ended on the Friday of the previous week. And the new trading week also begins with a significant plus above the 51 Euro mark.

Since the political will as well as the speculators and the market dynamics are difficult to predict, a solid procurement strategy for the coming years definitely makes sense in order to mitigate the blatant price fluctuation risks.

We would be happy to advise you on this and coordinate an appropriate procurement strategy with you.

(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. 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,

Due to Brexit, Great Britain has also left the European emissions trading system EU ETS and has developed its own emissions trading system based on the model of the EU ETS.

In order to achieve a more efficient reduction in pan-European greenhouse gas emissions, more than 40 industrial associations from Great Britain and the EU have now asked British Prime Minister Boris Johnson and the President of the European Commission, Ursula von der Leyen, to link the EU emissions trading system with the British emissions trading system.

In addition, in addition to fair competitive conditions, better market liquidity in both trading systems is to be ensured.

The European emissions trading system has been linked to the Swiss emissions trading system since last year.

In the last week of trading, the prices for EU emission allowances set a new all-time high of 44.90 in the benchmark futures contract December 2021, and in the spot market the prices for buyers were in some cases already above the 45 Euro mark.

This week, on all five working days, a total of 15.091.500 EUAs from the contingents of the EU, Poland and Germany will be auctioned at the Leipzig EEX.

(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. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into 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,

Germany’s much-discussed decisions to phase out coal-fired power generation are seen by many as having no alternative, others rate them as half-hearted and not a few complain about the immense costs involved. However, these decisions were made when CO2 emission certificates cost only a fraction of today’s market price. It was foreseeable that with a successfully functioning emissions trading system, coal would sooner or later become unprofitable as an energy source. The extreme price increases of the recent past made this scenario a reality sooner than many could have imagined. Whatever details may be criticized in connection with the coal phase-out, it was and remains inevitable. This is now being felt particularly hard by those governments that stubbornly wanted to maintain their coal production. This is now being felt particularly painfully by those governments that obstinately wanted to maintain their coal production.

Meanwhile, the carbon market continues to be driven more by the actions of a new class of investors than by fundamental data. They are obviously still betting on rising prices and undoubtedly already have the 50-euro mark in mind. It will therefore be interesting to observe whether there will be a drop in prices after the annual compliance closes at the end of April.

At the beginning of the new, short trading week, the market initially reacted clearly bullish and already rose again above 43 euros.

(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. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into 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 German Fuel Emissions Trading Act (BEHG) creates the basis for the issuance and trading of certificates in the national emissions trading system (nETS) for emissions from fuels and ensures that these emissions are priced unless they are covered by EU emissions trading.

This particularly affects the building and transport sectors. The aim is to achieve the national climate protection goals and climate neutrality by 2050. The purpose of the German national emissions trading system is to price fossil greenhouse gas emissions. The law was passed in 2019 as part of the German government’s climate package and came into force in 2021.

In the introductory phase (2021 to 2025), the certificates will be sold at a fixed price. At the start of CO2 pricing in early 2021, a price of 25 euros / tCO2 is planned; this will rise to 55 euros / tCO2 by 2025.

From 2026, emission rights will then be auctioned, whereby a price corridor with a minimum price of 55 euros and a maximum price of 65 euros per emissions certificate has been set. It is not yet known whether a price corridor will also be specified in the following years. The obligated companies must report their emissions for the year 2021 by July 31, 2022 for the first time and submit certificates for the reporting year 2021 in the emissions trading register of the German Emissions Trading Authority (DEHSt) by September 30, 2022.

The Leipzig energy exchange EEX, which is already auctioning the certificates within the framework of the European emissions trading system (EU ETS), was awarded the contract to issue emissions certificates last week. From 2026, the emission certificates are to be auctioned there as soon as free trade is to begin.

Advantag will expand its service areas and, as an intermediary, supply customers from the area of ​​national emissions trading with the required amount of certificates and at the same time advise them on the nETS.

The prices for EU emission allowances (EUA) fell slightly last week and closed on the spot market after a recovery on Friday with a slight minus at EUR 41.63 per ton of CO2e.

What is remarkable, however, is the price development for CER certificates from CDM projects, which can only be used until April 30, 2021 for the partial fulfillment of the tax obligation. These have risen sharply in recent weeks, as CERs of some CDM projects can be used as part of the global CORSIA aviation emissions trading scheme and are therefore subject to increased demand. In addition, plant operators who are obliged to participate in the EU emissions trading system check their last usable quotas for the third trading period and are currently having them procured.

(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. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into 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