Emissions Trading / Carbon Market News (07/08/2023)

Dear Madam or Sir,

A research team from the Swiss Federal Research Institute for Forest, Snow and Landscape (WSL) has looked at the temperature development over the last 1,200 years and, using 50 million cells from the annual rings of 188 Scandinavian Scots pines, has provided evidence that the current global warming is unprecedented, as they have now published in the journal “Nature”.

Sceptics of human-caused climate change keep referring to the medieval warm period. The team led by study leader Georg von Arx has now refuted claims that the current global warming could be caused by natural fluctuations. The research results show higher temperatures for the years from 850 to 1100 than in the following centuries, but these were significantly below the current temperatures.

Future studies should now also use this method to show the climatic development in other parts of the world, especially in the southern hemisphere.

The fight against climate change is now being waged in Europe and large parts of the world using market-based instruments. In the first half of 2023, Germany alone received almost four billion euros by issuing carbon emission allowances in the European emissions trading system and national emissions trading. This money is used to promote climate protection measures and green technologies.

In the first six months of the year, around 600 million euros were earned in the German national emissions trading system, compared to 650 million euros in the same period of the previous year. The total revenue from national emissions trading system last year was 6.4 billion euros. In 2023, the German Emissions Trading Authority expects total revenues of 6.8 billion euros, which shows that almost 90% of purchases in the second half of the year will be made by those who place fossil fuels on the market.

And this year, the companies that are obliged to participate in national emissions trading should calculate particularly precisely, since the price of the certificates could not only increase by 17% to 35 euros per national emission certificate, but possibly by 50% to 45 euros if the draft of the budget financing law is drafted accordingly should be decided. Only 10% of the certificates held as of 31.12. of the year on the registry account can still be purchased at the EEX in the following year at the old price. On the secondary market, too, the prices for 2023 nEZ will be above the current issue price of 30 euros in the coming year.

In the past week, the prices for emission allowances in the European emissions trading system have fallen further and lost almost 6% on a weekly closing basis.

Due to the missing Polish auction, which takes place every two weeks on Wednesday, only 4,957,000 EUAs will be auctioned on the EEX this week, which is currently one of the few bullish indicators, along with temperatures that are expected to rise again in parts of Europe.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)87.75 EUR82.74 EUR-5.01 EUR 
EUA (December-2023-Future)88.68 EUR83.65 EUR-5.03 EUR 
VER (Natural Carbon Offsets)1.93 USD1.90 USD-0.03 USD 
VER (CORSIA eligible Carbon Offsets)1.05 USD0.97 USD-0.08 USD 
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR 
ICE Brent Crude Oil (Benchmark Future)84.80 USD86.02 USD+1.22 USD 
EURO (Currency, Forex)1.1015 USD1.1010 USD+0.0005 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