Dear Sir or Madam,
At the recent World Climate Conference in Belém, Brazil, a new mechanism for international climate protection projects was developed, known as the Paris Agreement Crediting Mechanism, or PACM for short. This is the successor to the Clean Development Mechanism (CDM), which was adopted in 1997 by the Kyoto Protocol and came into effect in 2001.
The PACM enables countries, companies and organisations to invest in verified emission reduction or removal projects in order to achieve their climate targets. Two types of certificates are issued: Authorised Emission Reductions (AERs) and Mitigation Contribution Units (MCUs).
Strict testing and approval procedures are designed to strengthen confidence in such project mechanisms. The tradable CO2 certificates can be used not only for partial crediting towards countries’ reduction targets, but also for aviation under the CORSIA mechanism. Companies can also offset their greenhouse gas emissions with AERs and MCUs, although it is still uncertain whether there will be proportional use in the future within the framework of the EU ETS emission allowance trading scheme.
Last week, the UN climate protection organisation UNFCCC approved the first emission allowances to be issued under the United Nations’ new PACM mechanism. The first project involves clean cooking stoves in Myanmar, which were financed by South Korean companies. It is the first of a total of 165 projects that have been transferred from the previous Clean Development Mechanism (CDM), which expires at the end of this year, to the PACM.
Transit through the Strait of Hormuz, through which around a fifth of the world’s oil trade passes, is blocked. The Iranian Revolutionary Guard is threatening to attack any ship that attempts to pass through the strait. Transport flows are therefore significantly impaired. A prolonged blockade threatens to cause supply bottlenecks and have negative consequences for the global economy. Additional interest rate hikes are unlikely, while interest rate cuts could be delayed.
The energy markets have already reacted visibly to this. Even though Brent crude oil rose relatively moderately to USD 74.17 in December futures, the spot market closed at USD 92.61 last Friday. The British gas benchmark contract rose by almost 50% to GBP 123.67 last week, April deliveries rose to GBP 137.42.
To reduce the economic impact, China, among others, has stopped exports of diesel and petrol from its largest refineries, and the US government is attempting to limit the consequences of the war on global energy supplies by securing shipping through the Strait of Hormuz with state risk insurance and naval escorts.
Despite these circumstances, which are weighing on the economy, EU emission allowances appear to be bottoming out at around €70, which is why they closed the week with a small gain of 0.4%.
On the fundamental side, developments in the Middle East will remain important this week.
| Instrument | 27/02/26 | 06/03/26 | Change |
| EUA (December-26-Future) | 70.29 EUR | 70.57 EUR | +0.28 EUR |
| EUA2 (December-28-Future) | 67.10 EUR | 68.50 EUR | +1.40 EUR |
| nEZ25 (national Emission Allowances (D)) | 55.00 EUR | 55.00 EUR | +0.00 EUR |
| UKA (December-26-Future (UK)) | 46.14 GBP | 40.09 GBP | -6.05 GBP |
| UK Natural Gas (December-26-Future) | 82.48 GBP | 123.67 GBP | +41.19 GBP |
| ICE Brent Crude Oil (December-26-Future) | 73.15 USD | 74.17 USD | +1.02 USD |
| EURO (Forex) | 1.1806 USD | 1.1618 USD | -0.0188 USD |
(EUA, EUA2, UKA, Natural Gas, Crude Oil and Euro Currency shows day-end-exchange quotes of the benchmark contract. This market information has just an informational character and are no advice or offer to trade emission allowances or their futures and options. If you want to unsubscribe, please reply to this mail.)
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With kind regards,
Your Advantag – Team