Category: Carbon Market News

Dear Sir or Madam,

Brexit remains the topic on the financial markets and thus also on the courses for European CO2 certificates. The British Parliament forced Boris Johnson on Saturday to ask the EU for a Brexit extension. The EU immediately reached two letters – one requesting an extension of the deadline, which Johnson did not personally sign, and a second, expressing his displeasure at extending the deadline, which included his signature.

The EU will now decide on a deferral until 31.01.2020 by the end of the month. However, the topic will be an important topic at the beginning of the week at the European Parliament. The chances of further British voting on remaining in the EU have also increased, but a decision by the EU to extend the deadline has to be taken. Tens of thousands of British marched at the weekend from London Hyde Park to Parliament and also demanded a referendum again.

Last week’s development in London was viewed positively in the market for CO2 emission rights, and prices for EUA started this morning with more than one percent growth. It remains to be expected that news on political decisions in Brussels and London will continue to influence prices over the coming days.

This week, a total of 15,782,500 EUA will be auctioned on the Leipzig EEX on all five trading days.

(Average Quotes Exchange / OTC)
Instrument	11/10/2019	18/10/2019	Change
EUA (Spotmarket)	24.40 EUR	25.87 EUR	+1.47 EUR
EUA (December-2019-Future)	24.44 EUR	25.88 EUR	+1.44 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	60.60 USD	59.29 USD	-1.31 USD
EURO (Currency, Forex)	1.1043 USD	1.1169 USD	+0.0126 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,

When we talk about the advancing global warming, we repeatedly focus on certain regions of our planet. These include, for example, the melting polar caps in the Arctic and Antarctic, the melting of glaciers or the softening permafrost. However, the consequences of global warming have so far not explicitly mentioned one region that we know well: the Mediterranean. The intergovernmental organisation UfM (Union for the Mediterranean), which was founded in 2008, recently presented the first study on climate and environmental change in the Mediterranean region at a conference in Barcelona. The study was developed by more than 600 independent scientists from 35 countries – and the result is: “frightening”.

According to a report published this weekend by “Rheinische Post online”, the respected German ecologist Wolfgang Cramer in Barcelona pointed out that hardly any other region of the world is as threatened by climate change as the Mediterranean – where warming is progressing 20 percent faster than the global average. The maximum warming of 1.5 degrees fixed in the Paris Agreement has already been reached there.

The study warned that some islands and coastal strips, where 30 percent of the population live, would disappear from the scene during next generation. In addition, there is a risk of salinization of groundwater, which will result in around 250 million people suffering from water shortages. In addition, the scientists warned of mass extinction of marine fauna, ever more frequent heat waves, increasing droughts, mega forest fires and the spread of the Asian tiger mosquito and other disease vectors.

Against this background, the next world climate conference, which will take place from 2 to 14 December in Santiago de Chile, is awaited with particular excitement. Last week a preparatory conference was held at the invitation of Costa Rica. The focus was on the design of international market mechanisms. The particular challenge here is the establishment of a reliable billing system.

In the first two weeks of October, the European CO2 market experienced a veritable rollercoaster ride. Driven by political news and the resulting fluctuations in the energy sector, the price for the European Pollution Rights (EUA) fell from just over 25 euros to 22 euros. In the past week, the price initially stabilized, before it was able to gain significantly again on Thursday and Friday due to the positive Brexit news. The price for the December contract on the London ICE quickly exceeded both the 23- and 24-euro mark.

(Average Quotes Exchange / OTC)
Instrument	04/10/2019	11/10/2019	Change
EUA (Spotmarket)	22.94 EUR	24.40 EUR	+1.46 EUR
EUA (December-2019-Future)	23.01 EUR	24.44 EUR	+1.43 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	58.40 USD	60.60 USD	+2.20 USD
EURO (Currency, Forex)	1.0976 USD	1.1043 USD	+0.0067 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,

According to a report by the German magazine Spiegel, the climate protection law, which already appears to be less ambitious in its original form, should be further weakened. Among other things, no national target for CO2 reduction is planned for 2040 and the formulation of being greenhouse gas-neutral by 2050 has been weakened by the fact that this should only be “pursued” without obligation. In the end, all that remains is for Germany to reduce its greenhouse gas emissions by 55% by 2030 compared to 1990 levels. Furthermore, the Federal Government is now to be authorized, without the consent of the Federal Council, to decide on changes in the annual emission levels by means of a statutory ordinance. On 06.12.2019 the law should now be decided by the Bundesrat and the Bundestag. Robert Habeck of the Greens had already announced after the launch of the package to want to enforce improvements, especially in the starting price of the certificates, which should cost according to ideas of the grand coalition at the beginning only 10 € and thus have no meaningful control effect.

Prices for European CO2 allowances also fell again in the past week, reflecting stronger global economic risks and Brexit, which is likely to be over at the end of the month. From a technical point of view, the EUAs are now close to an important support line, which has its origins in the second quarter of 2018. They should not break this sustainable on a weekly basis, otherwise the market would be a bear case in the longer term. A total of 16,584,000 certificates will be auctioned at the Leipzig EEX this week, including 801,500 EUAA for aviation. In the coming week, there will be only 11,068,000 EUAs.

(Average Quotes Exchange / OTC)
Instrument	27/09/2019	04/10/2019	Change
EUA (Spotmarket)	25.29 EUR	22.94 EUR	-2.35 EUR
EUA (December-2019-Future)	25.30 EUR	23.01 EUR	-2.29 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	61.04 USD	58.40 USD	-2.64 USD
EURO (Currency, Forex)	1.0938 USD	1.0976 USD	+0.0038 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,

Last week a special report was published by the IPCC, which covers in particular the situation of the oceans and the cryosphere, ie the frozen parts of the earth system.

Oceans cover 715 of the Earth’s surface and contain 97% of the water of our planet. 10% of the land is still covered by glaciers and ice sheets. According to the IPCC report, global warming has led to a large-scale shrinkage of this cryosphere due to mass losses of ice and glaciers as well as increased permafrost temperatures.

Since 1970, the oceans have continued to warm unabated, absorbing more than 90% of global warming. Since 1993, the speed has doubled here. As a result, the oceans acidify quickly, which leads to loss of oxygen even in deeper waters. There is also an increase in sea level.

All of which leads to much stronger storms and extreme weather events, which affects the global availability of drinking water and threatens food security increasingly. Whole peoples will thereby lose their habitat and their nutritional bases; coastal cities are facing massive problems. This will eventually lead to significant population resettlements and migrations.

Significant global efforts, according to scientists, are needed to keep global warming below 2 ° C, ideally below 1.5 ° C. This realization has now also prompted Russia to join the Paris Agreement on Climate Change since large parts of the global permafrost are on Russian territory.

A global price for greenhouse gas emissions is therefore urgently needed and must be implemented as soon as possible. The odds increase with every extreme weather event.

Prices for European CO2 emission allowances also fell over the past week due to the energy market environment and fears of a slowdown in the global economy, although a smaller auction volume will be auctioned in Leipzig this week with 11 million EUAs.

(Average Quotes Exchange / OTC)
Instrument	20/09/2019	27/09/2019	Change
EUA (Spotmarket)	26.52 EUR	25.29 EUR	-1.23 EUR
EUA (December-2019-Future)	26.53 EUR	25.30 EUR	-1.23 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	64.66 USD	61.04 USD	-3.62 USD
EURO (Currency, Forex)	1.1017 USD	1.0938 USD	-0.0056 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,

This afternoon, the German Chancellor Angela Merkel will speak in front of the UN World Climate Change Conference in New York, attended by other heads of state. US President Trump, who is not known to prioritize knowledge, prefers to attend a religious event that is about faith.

The Chancellor also has the German “Climate Protection Plan 2030”, which should include the area and traffic. For this, a national CO2 certificate trade should be the controlling instrument. The prices are to start in 2021 with 10 euros per ton and by 2025 to 35 euros. From 2026, a maximum price of 60 euros per tonne should initially apply.

Calculated on the German consumer this will burden the driver by three cents in 2021. At a consumption of six liters that is 18 cents per 100 kilometers. This difference can be seen at many gas stations already in one day by natural fluctuations. Where there should be a steering effect remains the secret of the grand coalition. Also, why you want to increase the commuter flat rate by 5 cents per kilometer from the 20th kilometer to 35 cents, because here has the frequent traveler at 100 kilometers of commuting an advantage of four euros, which he can deduct more of his tax burden. At a tax rate of 30%, the discharge is thus 1.20 euros and a burden of emissions trading of 0.18 euros. The one who emits so much CO2, gets as a reward for more than a euro of the grand coalition for 100 kilometers. Although the train journey will now be about 10% cheaper, most commuters hardly convinced. And the cities and feeder roads will continue to be clogged with an upward trend.

For this reason, not only the opposition parties are disappointed, but also all those who have taken a courageous step towards climate neutrality. However, Robert Habeck of the German Greens wants to take the initiative in the Bundesrat and bring about corrections.

Although the fright of the attacks in the Middle East on the oil refineries has not yet been digested, the price of crude oil has returned to normal and has fallen back to the end of the week after rising by a fifth. What remained was a little more than four dollars or just over 7%. In the wake of this, the emission rights also increased to over 27 euros at the beginning of the week last week, but concluded at the end of the trading week only with a moderate increase of a plentiful half percentage point. This week, 15,782,500 EUAs from the EU, Germany and Poland are looking for their customers at the Leipzig EEX.

(Average Quotes Exchange / OTC)
Instrument	13/09/2019	20/09/2019	Change
EUA (Spotmarket)	26.33 EUR	26.52 EUR	+0.19 EUR
EUA (December-2019-Future)	26.38 EUR	26.53 EUR	+0.15 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	60.26 USD	64.66 USD	+4.40 USD
EURO (Currency, Forex)	1.1073 USD	1.1017 USD	-0.0056 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