Emissions Trading / Carbon Market News (07/02/2022)

Dear Madam or Sir,

The European Commission has agreed to allow investments in new gas and nuclear power plants in the European Union to be considered climate-friendly under certain conditions. Not only the German Federal Environment Agency of Economics and Climate Minister Robert Habeck have expressed clear criticism here, but the European Commission adopted the corresponding legal act and thus created the basis for investment decisions in gas and nuclear power.

Investments in new gas-fired power plants should be considered sustainable by the end of the decade, insofar as they then replace dirtier power plants and can be operated entirely with more climate-friendly gases, such as hydrogen produced in a climate-friendly manner, by 2035.

Austria and Luxembourg have already announced that they will take legal action, and the Netherlands, Spain, Sweden and Denmark have also spoken out against a sustainable classification of gas.

At the same time, German gas storage facilities are only 37% full and one can be lucky that the winter is currently very mild, as the “Aggregated Gas Storage Inventory” (AGSI) platform reported last week.

The Federal Republic of Germany consumed around 1,000 TWh of natural gas last year, most of which came from Russian pipelines. The German gas storage facilities can store a good quarter, i.e. a little more than 250 TWh, and act as a buffer. On particularly intensive days, they supply up to 60% of the required demand.

Germany is – just to keep gas prices from rising any further – dependent on the delivery of Russian gas using the delivery route known to date, but also to a large extent through Nord Stream 2, because more than half of the gas deliveries come from Russia, followed by one almost a third from Norway.

Liquefied natural gas (LNG) from overseas is on the one hand even less environmentally friendly due to its origin (partly fracking) and the transport with tankers, and on the other hand it is also visibly more expensive than gas from pipelines.

It remains to be seen how politics will react to this dilemma in the coming weeks.

The prices for European carbon emission allowances reached a new all-time high last week, which was 96.95 euros per ton of carbon on Friday in the December contract and is therefore only a good three euros away from the 100-euro mark.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)89.48 EUR96.03 EUR+6.55 EUR
EUA (December-2022-Future)89.92 EUR96.45 EUR+6.53 EUR
VCU (Voluntary Carbon Units ø)7.51 USD8.40 USD+0.89 USD
VER (Gold Standard Spotmarkt ø)7.55 USD8.00 USD+0.45 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)90.59 USD92.80 USD+2.21 USD
EURO (Currency, Forex)1.1131 USD1.1447 USD+0.0316 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.)

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With kind regards,

Advantag Services GmbH