Emissions Trading / Carbon Market News (03/01/2022)

Dear Ladies and Gentlemen,

The EU Commission made headlines at the end of last week when it submitted the proposal to classify nuclear energy and electricity from gas-fired power plants as a transition technology under the EU Taxonomy Regulation, which would give operators and builders of gas and nuclear power plants investment security.

In particular, France, which is strongly oriented towards nuclear power, was accommodated with this proposal, but the Austrian climate protection minister Leonore Gewessler has already announced that it will take legal action against this if such a move is enforced.

The German Federal Economics and Climate Protection Minister Robert Habeck (Greens) also announced that it was fundamentally wrong to label the “high-risk technology” nuclear energy as sustainable, because this obscures the long-term effects on people and the environment, since nuclear waste has left the EU for centuries will burden.

Coal power plants are becoming increasingly unprofitable as a result of CO2 emissions trading, but supply bottlenecks could arise if Russia does not supply enough gas. In addition, three more nuclear power plants in Germany were shut down punctually at the end of 2021.

This inevitably raises the question of how future grid stability is to be guaranteed, since there are not yet enough storage power plants to temporarily store sufficient renewable energy.

The market for CO2 emission rights in Europe developed extremely bullish over the past year. The EUA on the futures market (Dec-2021) cost EUR 32.72 per EUA on December 31, 2020, and the Dec-22 EUA future costs EUR 80.65 on December 31, 2021. This corresponds to an increase of no less than 146.5%, but the prices could not reach the 100 euro mark despite a short-term stay above the 90 euro mark.

The new year opens up new opportunities here and it would not be surprising if the 100 euro mark should be tested at the latest in April shortly before the end of the company’s tax obligation. Of course, this will only happen if there is a correspondingly bullish sentiment.

We wish all our readers of our market report a healthy and successful year 2022!

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)76.84 EUR80.36 EUR+3.52 EUR
EUA (December-2022-Future)76.87 EUR80.65 EUR+3.78 EUR
VCU (Voluntary Carbon Units ø)7.98 USD8.29 USD+0.31 USD
VER (Gold Standard Spotmarkt ø)8.53 USD8.03 USD-0.50 USD
nEZ (German National Carbon Units)25.00 EUR25.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)75.60 USD77.88 USD+2.28 USD
EURO (Currency, Forex)1.1328 USD1.1371 USD+0.0043 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. VCUs and VERs are average prices (CBL markets). 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