Category: Carbon Market News

Dear Sir or Madam,

Largely unnoticed by the rest of the German country, a clearly recognizable consequence of climate change in Germany is emerging in the Harz Mountains. Here are the dams of the six reservoirs, which are responsible for the regional drinking water supply, only at a level of only 45%. Since the beginning of the records in 1857, there has never been so little rainfall there as in the past few months. In addition, drinking water consumption has been particularly high due to the high summer temperatures.

If the drought persists, the water supply would last only a few months. The waterworks there have already taken initial measures to ensure the future supply. The people in the region are still not called to save water, but if no precipitation-rich fall and winter follow, the dams in February are mathematically empty in February 2019. A scenario that is known in Germany so far only from disaster films.

In the past week, CO2 emission certificates increased by more than 10% and closed above the mark of 23 euros per ton of CO2. In addition to the trend sequel, this may have been due to the announcement that Ministries of the Environment of France and Germany intend to devise common methods for the future pricing of greenhouse gas emissions over the next six months. An important point here is the extension of CO2 emissions trading to other industries and economic sectors that have so far been spared.

In July 2008, a European emission allowance (EUA) peaked at € 29.69 as all-time-high. 10 years later, the price seems to be aiming for this value again, because this morning the EUA were already well above the 25-euro mark. Demand for this week’s auctions and trade volumes are important indicators that need to be kept in mind.

 

(Average Quotes Exchange / OTC)
Instrument	2018-08-31	2018-09-07	Change
EUA (Spotmarket)	21.05 EUR	23.20 EUR	+2.15 EUR
EUA (December-2018-Future)	21.09 EUR	23.22 EUR	+2.13 EUR
CER (Spotmarket)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	77.40 USD	77.02 USD	-0.38 USD
EURO (Currency, Forex)	1.1601 USD	1.1553 USD	-0.0048 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 or +44.20.79790283.

 

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

In 2010, the German government launched the German “Energy and Climate Fund”, into which the proceeds of the auctions of German emission certificates on the Leipzig Energy Exchange EEX flow. This money is used, among other things, to finance electromobility, CO2 building renovation or to promote research into renewable energies.

This year, the fund can look forward to significant additional income. The German emissions trading office expects revenues to double to approximately two billion euros, which can be attributed to the significant increase in prices.

Prices for European emission rights rose again last week, reaching a new high of EUR 21.79 per ton of CO2 or its equivalent of other greenhouse gases on Thursday. Last time there was such a price level 10 years ago.

 

(Average Quotes Exchange / OTC)
Instrument	2018-08-24	2018-08-31	Change
EUA (Spotmarket)	20.70 EUR	21.05 EUR	+0.35 EUR
EUA (December-2018-Future)	20.75 EUR	21.09 EUR	+0.34 EUR
CER (Spotmarket)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	75.74 USD	77.40 USD	+1.66 USD
EURO (Currency, Forex)	1.1620 USD	1.1601 USD	-0.0009 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 or +44.20.79790283.

 

With kind regards,

Advantag Services GmbH

 

 

Dear Sir or Madam,

The Hausse is feeding the Hausse, say the exchange traders, and the European CO2 emission rights have now been running up since the end of last year. While the EUA closed exactly one year ago at EUR 6.09 per tonne of CO2, we have now, 12 months later, broken the 20 euro barrier and closed at EUR 20.70 on the spot market at the end of last week’s trading. This is an immense increase of 14.36% on a weekly basis or 239.90% on an annual basis.

The EUA price increases were accompanied by an impressive rise in oil prices, which were 5.59% higher on a weekly basis because US crude oil inventories had fallen by 5.8 million barrels due to lower net imports.

On Friday, however, it was clearly noticeable in the emissions trading market that market participants are increasingly hectic, even if only a slightly negative impulse is set. Shortly after 11:00 a.m., the EEX auction results of EUR 20.55 each for the 2,180,000 emission certificates became known, which was a few cents below the current stock exchange price with a lower number of bidders. As a result, some market participants closed long positions, which led to a brief but noticeable drop in prices from around EUR 20.60 per EUA to less than EUR 20.

This week, a total auction volume of just 8,088,500 EUA will be offered on the EEX, as no auction is taking place today due to the British bank Summer Holiday.

The summer break will end next week and the regular auction volume will be available again. Even if no auction is held for an EEX event on Thursday after next, a total of 18,528,000 allowances will be auctioned off on EEX and ICE. In the following 37th calendar week the auction volume will then rise to 21,501,000 EUA.

It therefore remains to be seen whether the price rises will continue at the higher auction volume or whether the market will enter a consolidation phase.

 

(Average Quotes Exchange / OTC)
Instrument	2018-08-17	2018-08-24	Change
EUA (Spotmarket)	18.10 EUR	20.70 EUR	+2.60 EUR
EUA (December-2018-Future)	18.14 EUR	20.75 EUR	+2.61 EUR
CER (Spotmarket)	0.27 EUR	0.29 EUR	+0.02 EUR
ICE Brent Crude Oil (Benchmark Future)	71.73 USD	75.74 USD	+4.01 USD
EURO (Currency, Forex)	1.1437 USD	1.1620 USD	+0.0186 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 or +44.20.79790283.

 

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

The German Federal Minister of Economics, Peter Altmaier, is currently on his way to push ahead with the expansion of the power lines that are to bring northern German wind energy to southern Germany. This is a sensible undertaking, because last year 38% of the energy produced in Germany came from renewable sources, but only about 12% of this was used because the lines to the south do not yet exist. This alone cost Tennet, the largest network operator in northern Germany, just under a billion euros in 2017, as the excess grid capacities had to be sold at a negative electricity price, which is ultimately passed on to the consumer.

According to plans, sufficient line capacities will not be available until 2025 to transport the wind power generated from the north to the south of Germany. Until then, several billion euros will probably still be spent on foreign countries purchasing our surplus quantities of electricity.

And once again this year the share of renewable energies has risen sharply. In the first half of 2018, 117 billion kilowatt hours were generated, another 10% more than in 2017. The German government’s goal of achieving at least 65% of energy generation through renewables by 2030 thus seems achievable.

In 2011, the nuclear catastrophe occurred in Fukushima, Japan. After German Chancellor Angela Merkel hastily and unexpectedly decided that German nuclear power plants would be taken off the grid in a few years, the prices for European emission certificates rose significantly and reached a temporary high of EUR 18.18 in June 2011. On Tuesday, the EUA stopped precisely this resistance, but exceeded it the next day to record a new 10-year high of EUR 18.28 per EUA. If the bullish price trend continues in September with a normal auction volume, a rise above the 20-euro mark would not come as a surprise.

On the other hand, the global economic risks that can have a significant impact on the European economy should not be ignored on the fundamental side either.

A sensible side effect of the current price increase is that electricity producers are increasingly switching from coal-fired power generation to gas, as gas electricity only generates half as much CO2 as coal-fired electricity.

 

(Average Quotes Exchange / OTC)
Instrument	2018-08-10	2018-08-17	Change
EUA (Spotmarket)	17.87 EUR	17.87 EUR	+0.23 EUR
EUA (December-2018-Future)	17.89 EUR	17.89 EUR	+0.25 EUR
CER (Spotmarket)	0.27 EUR	0.27 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	72.90 USD	72.90 USD	-1.17 USD
EURO (Currency, Forex)	1.1409 USD	1.1409 USD	+0.0028 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 or +44.20.79790283.

 

With kind regards,

Advantag Services GmbH

Dear Sir or Madam,

The heat wave in Germany takes a short break and gives way to normal Central European summer temperatures. However, some weather models see new temperature rises of more than 30°C this week and in the coming week this can become a little more. Long lasting rainfall is also not in sight in all parts of the country.

Scientists believe that climate change has already affected the jetstream to such an extent that it is currently slower. The jetstream is wavy at an altitude of 8,000 to 12,000 metres, with a waveform that has established itself, causing the unusually warm and dry European summer weather of recent weeks and months.

Weather and climate specialists see an important reason for the sluggish jet stream in the fact that the temperature difference between the oceans in the north and around the equator is reduced.

Depending on where a wave of the jetstream settles, hot and dry or wet and cool summers may occur. Of course, this also applies to all other seasons. This is becoming a major challenge, especially for agriculture, which also bears a large part of the responsibility for the production of climate-damaging greenhouse gases.

It is possible that the inclusion of mass-produced agricultural holdings in emissions trading would be one way of controlling this, even if this would lead to an end to cheaply produced meat.

Last week, European emission rights ranged between EUR 17.31 and 17.92 per tonne of CO2, and it seems to be a matter of time before the allowances exceed the EUR 18 mark. The halved auction volumes this month could contribute to this, as could higher electricity demand at high temperatures.

 

 

(Average Quotes Exchange / OTC)
Instrument	2018-08-03	2018-08-10	Change
EUA (Spotmarket)	17.65 EUR	17.87 EUR	+0.22 EUR
EUA (December-2018-Future)	17.68 EUR	17.89 EUR	+0.21 EUR
CER (Spotmarket)	0.29 EUR	0.27 EUR	-0.02 EUR
ICE Brent Crude Oil (Benchmark Future)	73.30 USD	72.90 USD	-0.40 USD
EURO (Currency, Forex)	1.1567 USD	1.1409 USD	-0.0158 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 or +44.20.79790283.

 

With kind regards,

Advantag Services GmbH