Category: Carbon Market News

Dear Sir or Madam,

The Federal Constitutional Court had requested the amendment, and the Federal Cabinet delivered at a truly sporting speed and passed the amendment to the Climate Protection Act last Wednesday. The corrections are primarily intended to distribute the climate protection efforts until 2045 more fairly between current and future generations.

More committed climate protection targets are to be welcomed, and it is not only the younger generation that is aptly calling for consistent changes to achieve the containment of global warming agreed by the global community in Paris. Clearly defined targets on the part of government decision-makers are the first decisive step.

But of course, it is comparatively easy to set a goal of losing fifteen kilograms of overweight instead of ten.  Much more difficult, however, are the subsequent efforts to change one’s diet and get plenty of exercise. It is the same with climate protection goals – all parts of society must make an appropriate but resolute contribution to achieving the goals.

There is no doubt that the avoidance of fossil fuels is a core area of necessary action, and the price of greenhouse gas emissions plays a crucial role in this. Here, during the past trading week, the EUA’s continued their already spectacular rally even more spectacularly. Despite a short-term setback on Thursday, the price rose by more than EUR 6.00. In the past six months, EUA has thus gained around 150 per cent – a fact that can be explained above all by the strategy of investors, who seem to have no interest in short-term profit-taking.

(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,

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