Emissions Trading / Carbon Market News (08/08/2022)

Dear Madam or Sir,

Quite a few who are currently on summer vacation on the German North Sea and Baltic Sea are happy about a lot of sun and rather atypical weather for local conditions. Others, such as farmers and foresters or inland waterway skippers on the Rhine River, are more concerned about the ongoing drought.

It is already clear that the summer of 2022 will continue the drought trend not only in southern Europe but also in Germany and even has the potential to overshadow the drought summer of 2018.

But not only in Europe it is hot, also in Siberia there were recently temperatures above 35°C in and around Yakutsk. This may not seem worrying at first, but there is the so-called permafrost soil, which naturally thaws at such temperatures. Gigantic amounts of dead plants are preserved in these soils. As these thaws, bacteria start the process of decomposing the organic remains, releasing vast amounts of CO2 and methane gas into the atmosphere, further accelerating climate change and in turn increasing the frequency of heat waves.

The fight against climate change requires the cooperation of large emitters, such as China and the USA. Even if the USA got its own climate-social package with a narrow majority of 51:50 votes through the Senate, the law still must go through the House of Representatives, where the Democrats have a larger majority. However, Nancy Pelosi’s trip to Taiwan not only snubbed China, but also led to the collapse of the US-China climate talks, which should not be underestimated in the global fight against greenhouse gas emissions.

In the past week, the prices for European CO2 emission certificates have risen by almost 8%, partly since the auction volume was halved in August and the efforts of EU ministers to reduce gas consumption by 15% by March 2023. Since this only works with the increased use of coal, despite the expansion of renewable energies, greater demand for EUAs from the energy supply companies is assumed, which is driving up prices. However, the significantly lower oil price was no reason to halt the rise.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)78.36 EUR84.49 EUR+6.13 EUR
EUA (December-2022-Future)78.55 EUR84.76 EUR+6.21 EUR
VCU (Voluntary Carbon Units ø)7.40 USD7.58 USD+0.18 USD
VER (Gold Standard Spotmarkt ø)2.98 USD3.43 USD+0.45 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)103.70 USD94.42 USD-9.28 USD
EURO (Currency, Forex)1.0227 USD1.0180 USD+0.0047 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