Emissions Trading / Carbon Market News (09/05/2022)

Dear Madam or Sir,

Yesterday the G7 countries agreed to stop importing Russian oil. The oil embargo is intended to deprive Russia of an important source of income for financing the war against Ukraine. The G7 includes the USA, Great Britain, France, Canada, Italy, Japan and Germany, which has held the presidency since the beginning of the year.

The European Union is also planning an oil embargo, but has yet to come to an agreement with the member states, which are currently strong dependent on imports of Russian oil. As of August 10, the EU has already placed an embargo on coal imports from Russia.

However, coal is also an important reason why the prices for EU emission allowances have recently broken through the 90 euro mark again and are showing a plus of 8.4% week-on-week.

Due to the high oil and gas prices and the planned phase-out of Russian fossil fuel imports, a greater use of coal for energy production is expected, especially since Germany intends to stick to its nuclear phase-out at the end of the year. Since coal has the worst climate balance in energy production, the energy producers will emit correspondingly more CO2 and therefore have a higher need for emission rights.

Coal produces 0.36 kg of CO2 per kWh of electricity, while natural gas produces 0.22 kg. Accordingly, producers have to buy 64% more allowances than if they used gas to generate electricity.

One can only hope that this will drive the further expansion of renewable energies in the EU, since Germany alone will produce a further 1,989 million tons of CO2 in the 2038 phase-out scenario from coal-fired power generation.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)84.87 EUR91.36 EUR+6.49 EUR
EUA (December-2022-Future)84.45 EUR91.54 EUR+7.09 EUR
VCU (Voluntary Carbon Units ø)10.63 USD10.74 USD+0.11 USD
VER (Gold Standard Spotmarkt ø)5.63 USD5.64 USD+0.01 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)106.55 USD112.81 USD+6.26 USD
EURO (Currency, Forex)1.0545 USD1.0534 USD-0.0011 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.)

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With kind regards,

Advantag Services GmbH