Emissions Trading / Carbon Market News (08/07/2024)

Dear Sir or Madam,

The effectiveness of EU emissions trading is repeatedly the subject of controversial debate. A current study now shows what the introduction of certificates since 2005 has achieved in various areas.

According to researchers from the Cluster of Excellence Climate, Climatic Change, and Society at the University of Hamburg, climate protection in the European Union has also directly benefited health. For example, emissions trading and the simultaneous tightening of air pollution control standards for large combustion plants in the EU have led to a drop in sulphur dioxide (by 39 per cent), particulate matter (by 28 per cent) and nitrogen oxides (by 14 per cent) in the air between 2005 and 2021.

The study thus shows that EU emissions trading is not only an effective instrument for reducing carbon emissions, but also offers significant additional benefits through the reduction of air pollutants. “The estimated health benefits could be equivalent to hundreds of billions of euros, even when the effects of simultaneously improved emission standards are taken into account,” explain the researchers.

A comprehensive policy assessment should therefore also take into account the additional benefits that go beyond CO2 reduction, such as reduced health damage from improved air quality. Communicating these benefits could help to increase public support for climate policy measures, as these additional benefits directly affect citizens and can be realised within Europe.

The past trading week began rather cautiously for the carbon market, which initially depressed prices. On Tuesday, however, the buy side took the initiative and invested a lot of money. As a result, the carbon price initially broke through the 70 euro mark without resistance and briefly rose to the 72 euro line on Wednesday. However, the publication of the Commitments of Traders Report (CoT Report) caused speculators to switch back to the more pessimistic side. The net short position rose again, whereupon the market followed the investment funds and finally levelled out in a range between 70 and 71 euros.

Thursday was an exciting day for the market as elections were held in the UK. The long-standing Conservative Tory government was voted out in a landslide, and the Labour government under Prime Minister Keir Starmer is now in power. The new British Foreign Secretary David Lammy has already spoken of a new beginning in relations with Europe. While the Conservatives have weakened climate protection in recent years, Labour stands for a more consistent climate protection policy. In the UK, developments on this issue therefore appear to be moving in a different direction to those within the EU.

The carbon market initially reacted very positively to the elections and pushed the price back above the EUR 71 mark, but then consolidated lower and closed at EUR 70.36 for the December future.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)67.47 EUR70.36 EUR+2.89 EUR
VER (Natural Carbon Offsets)1.01 USD1.01 USD+0.00 USD
VER (CORSIA eligible Carbon Offsets)0.43 USD0.21 USD-0.22 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)85.69 USD86.90 USD+1.21 USD
EURO (Currency.. Forex)1.0707 USD1.0839 USD+0.0132 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