Emissions Trading / Carbon Market News (06/12/2021)

Dear Sir or Madam,

European greenhouse gas emission allowances rose a whopping 7.5% last week, even if they could not stay above the 80 euros per EUA mark, which was first conquered on Friday, at the weekly closing rate.

Another trigger was, despite the inconsistent energy price developments, information from a fund manager who still sees prices in the three-digit range in 2021. After the EUAs have already increased by a good 140% this year and have experienced a price increase of around 1,160% in the last five years, that would not be surprising, because an age-old stock exchange rule says: “the trend is your friend”.

For compliance buyers and portfolio managers, it is more difficult to answer the question of whether one should stock up at least part of the portfolio now or rather wait until there is a corresponding correction on the market.

From a technical point of view, the time would have come for the market to undertake a correction, which would have the first support in the area around 70 euros and then a little above the 60 euros mark.

In any case, the EU member states are currently extremely divided on how to react to this bull market, which makes short-term market intervention seem unlikely. However, statements from official sources alone could lead market participants to take short positions. The coming trading week will definitely remain interesting.

In the new trading week, a total of 11.4 million EUA will be auctioned on the Leipzig EEX on all five bank working days, as will the next week. On Monday, December 20th, 2021, an auction of 2,542,500 EUAs will take place for the last time this year; on the same day is also the last trading day of ICE-EUA-December-2021-Futures.

The first auction in 2022 will not start until the second calendar week on January 10th, and a total of 9,291,000 EUAs will be auctioned on four days in the second week.

In the national German emissions trading system, the available trading days are also drawing to a close. During this and the next trading week, only four fixed price auctions will take place on Tuesdays and Thursdays.

If companies subject to the tax do not take part in these dates, they only have the chance to get national emission certificates (nEZ) on the secondary market (OTC / over the counter) this year.

At a price of EUR 25.00 you can only purchase nEZ if you have already purchased some by the end of the year – and then only 10% of this amount. After that, the nEZ costs 30.00 euros or you can try to get OTC pieces on the secondary market.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)72.77 EUR78.23 EUR+5.46 EUR
EUA (December-2021-Future)72.78 EUR78.25 EUR+5.47 EUR
VCU (Voluntary Carbon Units ø)7.44 USD7.56 USD+0.12 USD
VER (Gold Standard Spotmarkt ø)8.68 USD8.92 USD+0.24 USD
ICE Brent Crude Oil (Benchmark Future)72.82 USD70.01 USD-2.81 USD
nEZ (German National Carbon Units)25,00 EUR25,00 EUR0,00 EUR
EURO (Currency, Forex)1.1316 USD1.1312 USD-0.0004 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