Category: Carbon Market News

Dear Sir or Madam,

According to the organizers on Saturday, 670,000 demonstrators participated in a rally in favor of a second referendum on Brexit. The people moved through central London to the parliament, in order to express to the politicians a particularly strong signal of the alleged popular will. But the demonstration prospectively will have little effect, as the political sentiment in parliament has clearly changed in favor of a withdrawal. In addition, according to a recent survey, around 20 percent of British industrial companies have already put their plans into action in the event of a hard Brexit, and it should be as much as 80 percent by the end of the year. In addition to downsizing, this includes relocation of production, the building up of additional storage capacities to cushion bottlenecks, the adjustment of contractual conditions and, finally, the postponement of investment decisions.

According to Prime Minister May, moreover, 95 percent of the withdrawal conditions are negotiated. Nevertheless, the issue of border regulation in Ireland remains a problem when leaving the European family of states, but this has primarily a religious-historical background.

The CO2 market was initially very bearish last week. From its level just above the 20-euro mark, the price passed quickly towards the south at the beginning of the week. On Tuesday, the price fell temporarily below 18 euros, which was used immediately as a buy signal. A similar scenario was repeated on Thursday, but buyers reacted already above the 18-euro mark this time, raising the price to a range between EUR 19.50 and EUR 20.00.

 

(Average Quotes Exchange / OTC)
Instrument	2018-10-12	2018-10-19	Change
EUA (Spotmarket)	20.35 EUR	19.71 EUR	-0.64 EUR
EUA (December-2018-Future)	20.39 EUR	19.76 EUR	-0.63 EUR
CER (Spotmarket)	0.28 EUR	0.28 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	81.53 USD	79.95 USD	-1.58 USD
EURO (Currency, Forex)	1.1576 USD	1.1517 USD	-0.0059 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,

Yesterday, the United Kingdom and the EU wanted to clear the main outstanding issues in Brexit at a meeting of negotiators, before the progresses on Wednesday at the EU summit should be discussed. But the talks were broken off without result. The main disputed point was once more the necessary border regulation between Northern Ireland and the EU member Ireland, above all because of the fear of a resurgence of the old Ireland conflict. Time is short, because there are not six months left until the official exit date.

In case of the failure of the negotiations, the UK Government has recently clarified that Britain will leave the ETS, the European Emissions Trading Scheme, by the end of March 2019. What this will mean for the carbon market is not yet clear, especially as British companies are considering the possibility of opening register accounts in mainland Europe in order to continue trading in pollution rights.

Last weekend, a series of temperature records were broken again. The peak in Germany was officially 29.7 degrees measured on Saturday – and that middle of October! But not the heat in Europe, but the catastrophic weather events in his country, the recent denier of climate change, US President Donald Trump, now apparently showed a kind of rethinking. After all, he admits that something is changing, even though he does not believe that this change is man-made and that urgent action is needed to prevent even worse catastrophes. He definitely does not want to invest billions and endanger thousands of jobs, Trump said in a recent interview. But that he admits the existence of a climate change at all, is already a small sensation.

Quite different the situation at our Polish neighbors. The country is dependent on coal burning for around 85 percent of its energy needs, and the government clearly has no plans to change that. While the skyrocketing carbon price elsewhere leads to market-driven consequences, the ruling PiS cuts subsidies for renewable energy and instead prepares compensation for companies and households. It will be interesting to see when pressure from the polish people finally sets in, as the so-called winter smog is becoming more unbearable from year to year there.

The CO2 market remained highly volatile during the past trading week. Within just a few days, the highly speculative market bridged a price range of around four euros and stopped at last near 18.30 euros. Recently, however, the price stabilized again above the 20-euro mark.

 

(Average Quotes Exchange / OTC)
Instrument	2018-10-05	2018-10-12	Change
EUA (Spotmarket)	22.09 EUR	20.35 EUR	-1.74 EUR
EUA (December-2018-Future)	22.16 EUR	20.39 EUR	-1.77 EUR
CER (Spotmarket)	0.28 EUR	0.28 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	84.12 USD	81.53 USD	-2.59 USD
EURO (Currency, Forex)	1.1522 USD	1.1576 USD	+0.0054 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 IPCC has released its latest report, which foresees drastic global consequences if humanity fails to limit global warming to a maximum of 1.5°C, compared to the pre-industrial era. In its report, the IPCCC believes that this target can be achieved if global greenhouse gas emissions are reduced to 45% of 2010 levels by 2030. However, this would require a closed and immediate action by all those nations responsible for these greenhouse gas emissions.

The fact that this alone in the former climate protection flagship Germany does not work, shows recently on the subject of diesel vehicles. Instead of taking decisions to retrofit Euro 4 and 5 vehicles with state-of-the-art technology, some of which are still doing their job well, exchange premiums should be used to purchase new vehicles. Considering that the production of a car causes as much greenhouse gas as its average useful life, this is a shameful result. At the same time, the EU is already warning that the old, dirty diesel cars would be exported especially to Eastern Europe, where it will continue to emit its pollutants.

A positive signal for climate protection was issued last week by the German Higher Administrative Court of Munster, which did not see sufficient evidence for the presentation of German power generator RWE that the clearing of the remaining Hambacher forest is necessary for the security of supply with electricity. This celebrated on Saturday about 50,000 protesters on the ground peacefully, after the ban on demonstrations could be stopped by urgent applications at the Administrative Court of Aachen and the Federal Constitutional Court. Now it is up to the German coal commission to organize a swift exit from lignite burning.

CO2 emissions rights were also given a boost, which rose again sharply on Friday after a strong auction result and posted a plus of 4.4% on a weekly basis.

 

(Average Quotes Exchange / OTC)
Instrument	2018-09-28	2018-10-05	Change
EUA (Spotmarket)	21.16 EUR	22.09 EUR	+0.93 EUR
EUA (December-2018-Future)	21.21 EUR	22.16 EUR	+0.93 EUR
CER (Spotmarket)	0.29 EUR	0.28 EUR	-0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	82.75 USD	84.12 USD	+1.37 USD
EURO (Currency, Forex)	1.1603 USD	1.1522 USD	-0.0081 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,

Chaos days – it’s hard to find another summary term for the events of the past week.

Chaos days, for example, for the uncounted inhabitants of the Philippines and China, who had to be evacuated because of the typhoon “Mangkhut”, suffered heavy damage to their belongings and many of whom have already died. In the Philippines alone, 65 dead people have been reported so far, but many residents are still missing.

Chaos days, too, because at the time of the typhoon’s landfall, on the other side of the earth the storm “Florence” had also claimed its first lives and is incessantly flooding the southeastern US with unimaginable masses of water.

Chaos days but unfortunately also brought about by people, such as in the North Rhine-Westphalian Hambacher forest. The current eviction of the forest area, which has been occupied for some 6 years, proves to be a reflection of the political situation in Germany. Driven by the AFD, which is known to deny the man-made climate change, the policy is divided into the proponents of the fastest possible exit from the dirtiest energy source on the one hand and those who want to use lignite as long as possible. Here especially the energy giant RWE, who likes to advertise with the pun “voRWEggehen” (moving in front, to lead the way), but probably meant something else. Even though RWE may officially want to keep an eye on supply security, electricity costs and jobs in addition to climate protection in the energy transition, the current fight in the Hambacher Forest means everything else but “lead the way”. While, on the one hand, the share of renewable energies in Germany continues to rise and, on the other hand, coal burning is becoming more and more unattractive as a result of the significantly increased CO2 price, one has to consider the fight for the Hambacher Forest more as the behavior of a regime, which on the last day before the end of the war is still hastily carrying out legal executions of opponents of the regime. Anyway, it could be good that this shot goes backwards.

Chaos days, however, also on the carbon market. From the circle of intermediaries, someone on Friday called the situation as “insane”. From a technical point of view, the market has experienced the worst decline since 2006, with a fabulous 30 percent drop within one week. The background only can be explained with panic sales. On Wednesday, the market already saw a slightly weaker auction of Polish certificates on the EEX, followed by a really significantly worse result one day later. Speculative traders reacted in panic. On Monday of the same week, the price for pollution rights had risen to a high of 25.79 EUR and now probably none of the speculators wanted to miss the possible turnaround. This in turn automatically triggered this spectacular price drop through previously set stop-loss orders, which only came to a standstill at 17.90 EUR. In this dramatic phase, whose end was not foreseeable in the course of Friday, the spot market even partially discontinued trading. Intelligently, however, some traders stabilized with purchases the market again. Since then, the price has been moving in a range around the 20-euro mark.

 

(Average Quotes Exchange / OTC)
Instrument	2018-09-07	2018-09-14	Change
EUA (Spotmarket)	23.20 EUR	19.94 EUR	-3.26 EUR
EUA (December-2018-Future)	23.22 EUR	19.97 EUR	-3.25 EUR
CER (Spotmarket)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	77.02 USD	78.08 USD	+1.06 USD
EURO (Currency, Forex)	1.1553 USD	1.1627 USD	+0.0074 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