Category: Carbon Market News

Dear Sir or Madam,

The German company Biontech and its US partner Pfizer announced an apparently groundbreaking success in the corona vaccine field at the beginning of last week. The innovative mRNA vaccine is expected to provide more than 90% protection against Covid-19. The experts are positively surprised and speak of “extraordinary” results and a “giant leap forward”. Both the speed of development and the efficiency are exceptionally high, and the otherwise numerous and vocal sceptics are relatively reluctant.

This optimism is of course balsam for the markets battered by the pandemic. On the other hand, however, we should not expect too much euphoria at this stage, as the official test procedure is of course still ongoing and approval is not expected before the beginning of next year, at least not in Europe. Even this may sound very optimistic, but there are significant social challenges ahead, especially until then.

When the first reports of the new virus from China started to circulate almost a year ago, one fact was particularly worrying: the Chinese New Year regularly leads to the world’s largest travel season, with hundreds of millions of travellers. Traditionally, Chinese families gather together and it is not unusual for annual holidays to be used to return home from the most distant parts of the world. This will present the Chinese authorities with a huge logistical and socio-political problem in early 2021.

This year’s Christmas could play a similar role in Europe, with similar traditions. Intensive shopping trips, combined with a visit to a Christmas market and the obligatory family and friends meetings could once again greatly accelerate the spread of the corona virus – just before a vaccine becomes available. In some European countries, however, the effects of the second wave are already frightening.

The CO2 market still benefited a little from the election victory of US President-elect Joe Biden last week. But mainly the news of the breakthrough of the corona vaccine boosted the price, although it is still too early to speak of a real breakthrough.

(Average Quotes Exchange / OTC)
Instrument	06/11/2020	13/11/2020	Change
EUA (Spot-Market)	25.43 EUR	26.36 EUR	+0.93 EUR
EUA (December-2020-Future)	25.45 EUR	26.38 EUR	+0.93 EUR
CER (Spot-Market)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	39.67 USD	42.70 USD	+3.03 USD
EURO (Currency, Forex)	1.1870 USD	1.1834 USD	-0.0036 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. 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,

For us Europeans, the seemingly endless wrangling over a final and official result of the US presidential election is difficult to understand. And while many would now like to get back to business as usual, it is to be feared that this issue will remain open for some time to come – at least that is what the statements of the current president suggest.

In his first public statements, President-elect Joe Biden (46th President) pointed out that, in addition to the overriding goal of reconciling a divided society, there are other issues that should be the focus of his administration from the first day of his presidency, which begins in January. These include the organised fight against the Corona crisis on the basis of scientific recommendations and the return to the United Nations Paris Climate Change agreement. Donald Trump had just identified these issues as particularly damaging to the US economy.

The European emissions trading scheme has acknowledged the probable end of uncertainty and the expected change in policy on the other side of the Atlantic with obvious goodwill. The price of EEA, which has recently been severely hit, has risen significantly. Even at the start of the new trading week, the principle “buy the rumour, sell the fact” does not seem to work, as the CO2 market is currently continuing its upward trend.

(Average Quotes Exchange / OTC)
Instrument	30/10/2020	06/11/2020	Change
EUA (Spot-Market)	23.70 EUR	25.43 EUR	+1.73 EUR
EUA (December-2020-Future)	23.71 EUR	25.45 EUR	+1.74 EUR
CER (Spot-Market)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	37.85 USD	39.67 USD	+1.82 USD
EURO (Currency, Forex)	1.1648 USD	1.1870 USD	+0.0222 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. 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,

As part of the German government’s climate package, the “Law on National Certificate Trading for Fuel Emissions” or the Fuel Emissions Trading Act (BEHG) will come into force on January 1, 2021. The associated carbon dioxide pricing on fossil fuels put into circulation affects around 3,500 companies in Germany in the fields of natural gas, liquid gas, heating oil and diesel & Otto fuels.

In a transitional phase until 2025, trading in fossil fuels is regulated through the sale of certificates with a staggered fixed price of up to € 55 per tonne of CO2. From 2026, the certificates will then be awarded by auction, with a price range of 55-65 € / emission certificate and ton of CO2 being set for the first year. It has not yet been decided whether a price corridor will also be used in the following years. Calculated on the heating costs, these will increase by up to € 1.19 per square meter by 2025 if fossil fuels are used.

Also being discussed is the limitation of the apportionability to 50%, so that landlords would also have to bear part of the additional costs. The law aims to promote energy-efficient and climate-neutral building types and the use of renewable energies.

According to the German Federal Environment Agency, it is crucial that at the beginning there is a clear separation between the classic EU emissions trading sectors (energy and industry) and the new sectors (especially buildings and transport). Otherwise there is a risk that the reduction will mainly take place in the traditional sectors. A common system would therefore initially not provide sufficient financial incentives to say goodbye to climate-damaging technologies in buildings and mobility.

In the past week of trading, the prices for European emission rights (EUA) came under significant pressure due to the upcoming elections in the USA and the increasingly worsening corona crisis and fell a good seven percent on a weekly basis. This trend continues even at the start of the market today.

The total of 21.7 million emission rights, which will be auctioned in Leipzig this week, will also weigh on prices and it will remain interesting to see how much demand for the auctions is. In addition, the outcome of the elections in the USA will remain important, as will the further development of the corona pandemic in Europe.

(Average Quotes Exchange / OTC)
Instrument	23/10/2020	30/10/2020	Change
EUA (Spot-Market)	25.49 EUR	23.70 EUR	+0.54 EUR
EUA (December-2020-Future)	25.49 EUR	23.71 EUR	+0.65 EUR
CER (Spot-Market)	0.31 EUR	0.29 EUR	+0.03 EUR
ICE Brent Crude Oil (Benchmark Future)	41.64 USD	37.85 USD	-1.16 USD
EURO (Currency, Forex)	1.1860 USD	1.1648 USD	+0.0143 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. 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 continued reluctance to buy due to political and economic risks had brought the price for European CO2 emission rights EUA to a new four-month low last week, which was just above the 23 euro mark. On Friday, however, prices recovered at the start of trading and ensured that the last week of trading ended with a weekly gain of more than 2%.

But it was not only the favorable purchase prices that motivated the buyers here, but also the report that the EU environment ministers were partially able to agree on measures to achieve climate neutrality in 2050, even if the topic will probably only be deepened by the European heads of government in December will be. Should a reduction target of 55% or even 60% be discernible as a reduction target for 2030, this should have a clearly bullish effect on the prices for EUA.

This week, a total of 14.4 million EUAs will be auctioned at the Leipzig EEX, followed by 21.7 million certificates in the coming week, which next Wednesday will also include 891,500 EUAA for aviation.

(Average Quotes Exchange / OTC)
Instrument	16/10/2020	16/10/2020	Change
EUA (Spot-Market)	24.95 EUR	25.49 EUR	+0.54 EUR
EUA (December-2020-Future)	24.84 EUR	25.49 EUR	+0.65 EUR
CER (Spot-Market)	0.28 EUR	0.31 EUR	+0.03 EUR
ICE Brent Crude Oil (Benchmark Future)	42.80 USD	41.64 USD	-1.16 USD
EURO (Currency, Forex)	1.1717 USD	1.1860 USD	+0.0143 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. 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,

Three topics are currently dominating not only the news but also the sentiment on the markets: the presidential election in the USA, the possibility of an unregulated Brexit and the second wave of corona infections.

While the outcome of the US election on 3 November is unlikely to have a particularly strong impact on European markets, the virus situation in Europe remains a significant burden and politicians are finding it difficult to take the right decisions. There is a real feeling that both the people and the policy makers are torn between concern for life and health on the one hand and the burden on the economy on the other. A golden road is nowhere in sight even at the beginning of the second wave of infection.

European emissions trading was also unable to avoid the pressure of the indices in the past trading week and closed weaker again. Even the 25 euro mark for December contracts did not withstand the pressure and was undercut by a few cents. The announcements from Brussels to significantly increase the emission reduction target by 2030 initially only had a short-term effect in this context, but it will still have a significant impact on price development. The same applies to the start of the fourth trading period and the effect of the market stability reserve, which should by no means be underestimated.

(Average Quotes Exchange / OTC)
Instrument	09/10/2020	16/10/2020	Change
EUA (Spot-Market)	25.81 EUR	24.95 EUR	-0.86 EUR
EUA (December-2020-Future)	25.71 EUR	24.84 EUR	-0.87 EUR
CER (Spot-Market)	0.29 EUR	0.28 EUR	-0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	42.82 USD	42.80 USD	-0.02 USD
EURO (Currency, Forex)	1.1823 USD	1.1717 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. 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