Emissions Trading / Carbon Market News (21/12/2020)

Dear Sir or Madam,

a mutation of the Covid-19 virus has occurred in Great Britain, which is why the British government is trying to seal off the clusters. In addition, France has closed the Eurotunnel and both Germany and Austria have imposed entry stops on aircraft from the island.

This is likely to affect the British economically even before a very likely hard Brexit. However, this is not only associated with economic uncertainties for the British in the coming weeks, but is also likely to have a negative impact on the EU financial markets in the remaining trading days of the end of 2020.

Starting next year, Great Britain will no longer participate in the European emissions trading system EUETS. After both a CO2 tax and emissions trading were up for grabs, the government has now decided on its own CO2 trading system. There will be a minimum price of GBP 15 per ton in the UK ETS and the CO2 certificates will be auctioned on the London ICE as usual.

The affected sectors in Great Britain are now to be reduced by 24% from 155 million tonnes in the coming year to 117.5 million tonnes of CO2e in 2030 using the cap-and-trade mechanism.

However, it is unclear whether the British emissions trading system should be linked to the EU ETS in a similar way to the Swiss emissions trading system and will certainly depend on the outcome of the extended Brexit negotiations.

Last week, the prices for EU emission rights showed a new all-time high of EUR 32.50 per EUA for the high-volume December 2021 contract and the trading week also ended with a visible plus, which in addition to higher energy prices also came with the end of the auctions related.

The ongoing uncertainties regarding the Brexit negotiations and the further development of the pandemic as well as the new British virus mutation will certainly continue to affect trade in the Christmas week. The new week therefore started with a clear minus of more than 3% and some speculators could also use this to take profits.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)30.48 EUR30.92 EUR+0.44 EUR
EUA (December-2021-Future)30.52 EUR31.10 EUR+0.58 EUR
CER (Spot-Market)0.31 EUR0.36 EUR+0.05 EUR
ICE Brent Crude Oil (Benchmark Future)49.96 USD52.26 USD+2.30 USD
EURO (Currency, Forex)1.2108 USD1.2255 USD+0.0147 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