Emissions Trading / Carbon Market News (10/06/2024)

Ladies and gentlemen,

Europe has voted and the feared lurch to the right has come true. But what impact will this have on the European Green Deal and the necessary decarbonisation of EU member states by the middle of this century?

In the elections five years ago, the climate crisis was taken seriously politically and climate protection was an important part of the election programme of all democratic parties in Europe. The “Fit-for-55” programme, which builds on the “Green Deal” and stands for a 55% reduction in greenhouse gases in the EU by 2030 compared to 1990, is an important milestone and carbon emissions trading is one of the core elements.

The conservative camps have already announced the end of the combustion engine phase-out, but this is not a serious problem with strong EU emissions trading prices, as CO2 pricing automatically has the same steering effect. In addition, many car manufacturers themselves have already announced an end to production, as combustion engines are highly inefficient.

The EU Parliament must now decide in the near future how it wants to deal with the expansion of renewable energies and still existing subsidies for fossil fuels. The European energy network must also be improved.

The European market for carbon emission allowances reflected such uncertainties last week and the price fell for the second week in a row.

With a closing price of EUR 71.39 for the EUA December 2024 contract, the price has not only visibly left the upward trend channel, but has also dipped below the important 200-day-line, although this acted as good support for a long time last week. This means that the 200-day-line at 71.50 is now a serious resistance level, as is the 38-day-line at 73.18. After the EUR 70 mark, the next support level is around EUR 66.50, followed by the EUR 60 area.

Depending on how the market behaves due to the outcome of the European elections, this could be a good price to stock up on some of the remaining demand needed to fulfil the compliance obligations of plant operators, as the deadline at the end of September is coming sooner than some market participants might think and in August we will have the halved auction volume again, which naturally affects the supply/demand ratio accordingly.

In the new trading week, the high auction volume of 13,404,500 EUAs could also have a bearish effect, as could the rather moderate temperatures in Europe, which require neither heating energy nor particularly large amounts of electricity for air conditioning systems.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)74.10 EUR71.39 EUR-2.71 EUR
VER (Natural Carbon Offsets)1.04 USD1.03 USD-0.01 USD
VER (CORSIA eligible Carbon Offsets)0.41 USD0.37 USD-0.04 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)81.65 USD79.74 USD-1.91 USD
EURO (Currency, Forex)1.0833 USD1.0817 USD-0.0016 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

ADVANTAG Services GmbH | Glockengasse 5 | 47608 Geldern | Tel.: +49(0)2831.1348220 | Fax: +49(0)2831.1348221 | E-Mail: info@advantag.de | Web:  www.advantag.de

Managing Director Raik Oliver Heinzelmann

Headquarter: Geldern (Germany) | Local Court Kleve HRB 12470 | VAT.-ID:   DE292139472

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