Emissions Trading / Carbon Market News (05/02/2024)

Dear Madam or Sir,

Last week, the European Commission initiated infringement proceedings against Germany and 25 other countries for failing to implement a directive on EU emissions trading (EU ETS).

This directive concerned, among other things, the creation of a social climate fund, the new EU emissions trading system for transport and buildings, which is due to start in 2027, and the extension of emissions trading to shipping.

The European Commission has also drawn up a draft climate target for 2040, which, according to the German Press Agency, envisages a 90% reduction in greenhouse gas emissions compared to 1990 and is to be presented this week.

The most important component here is the “Fit for 55” legislative package, which includes extensive measures for industry, the energy sector, the transport sector and agriculture. 

According to the draft, a reduction of 90 – 95% by 2040 is required in line with the recommendations of the Scientific Advisory Board in order to prevent key tipping points in the climate system and “potentially catastrophic impacts on human society and ecosystems” from being exceeded.

As the EU’s central market-based instrument is CO2 emissions trading, the draft is also likely to have an impact on the future design of emissions trading, such as the inclusion of additional sectors and the increase in the annual reduction factor of the emission allowances to be auctioned.

Last week, prices in EU emissions trading fluctuated within a relatively moderate range between EUR 61.23 and EUR 65.16 in the EUA December 2024 benchmark contract.

As the Polish auction will not take place on Wednesday, a total of 11,094,500 EUAs will be auctioned on the other trading days.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)63.58 EUR63.40 EUR-0.18 EUR
VER (Natural Carbon Offsets)1.33 USD1.59 USD+0.26 USD
VER (CORSIA eligible Carbon Offsets)0.77 USD0.88 USD+0.11 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)83.15 USD77.40 USD-5.75 USD
EURO (Currency, Forex)1.0848 USD1.0788 USD-0.0060 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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