Emissions Trading / Carbon Market News (07/07/2023)

Dear Madam or Sir,

The German Federal Environment Agency published its annual report for 2022 last week. This showed that the emissions of the approx. 1,730 German plants that are subject to trading in the EU-ETS only fell minimally from 355 to 354 million tons of CO2 or its equivalent (CO2e). This was also hardly to be expected after energy production in particular had used significantly more coal-fired power, as there were fears of gas shortages due to the Ukraine war. As a result, emissions in the energy sector increased for the second year in a row, by three percentage points.

In the aviation sector, emissions rose by a significant 55% to almost 7.2 million tons of CO2 due to the decline in the corona pandemic. In industry, there was a decline of six percent to 112 million tons of CO2e. And Europe-wide, the systems covered by the EU ETS have only shown a minimal decrease to 1.32 billion tons of CO2e.

In the past week of trading, the prices in the mandatory EU emissions trading system were visibly struggling with the increased supply volume at the primary market auctions. Accordingly, the price failed to break out of a relatively strong sideways-below trendline, causing prices to decline 3.3% on a weekly closing basis.

In national German emissions trading, the government has now agreed to raise the price per national emissions certificate (nEZ) next year to EUR 45.00 per nEZ from the current EUR 30.00, as originally planned when the Fuel Emissions Trading Act (BEHG) came into force. In the first amendment last year, the price for 2023 was reduced by five euros to EUR 30.00; In 2024 it should be EUR 35.00 based on the change.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)88.09 EUR85.18 EUR-2.91 EUR 
EUA (December-2023-Future)89.08 EUR86.16 EUR-2.92 EUR 
VER (Natural Carbon Offsets)2.01 USD2.39 USD+0.38 USD 
VER (CORSIA eligible Carbon Offsets)1.15 USD1.59 USD+0.44 USD 
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR 
ICE Brent Crude Oil (Benchmark Future)75.13 USD78.28 USD+3.15 USD 
EURO (Currency, Forex)1.0912 USD1.0968 USD+0.0056 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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