Emissions Trading / Carbon Market News (11/04/2023)

Dear Madam or Sir,

Buildings are responsible for about 40% of global greenhouse gas emissions. In the USA, they also stand for the consumption of 70% of the electricity generated there.

The US billionaire Tom Steyer is now planning to make buildings climate-neutral within three years through his company Galvanize Climate Solutions using renewable energies and modernization measures.

Commenting on this plan, Joseph Sumberg, CEO of Galvanize Real Estate, said: “This is a real estate strategy aimed at decarbonization … Capitalism will look at this successful strategy and replicate it.”

Another example is BlocPower, a New York company backed by the Microsoft Climate Innovation Fund and investment bank Goldman Sachs. The startup recently raised $155 million in investments to perform the energy renovation of green buildings and is now starting over 5,000 homes and buildings.

Of course, American billionaires in particular are not doing this for purely altruistic reasons. Rather, investors see energy-related renovations as a must-have and an important criterion when evaluating real estate. Otherwise, unrenovated existing properties will become distressed objects.

What the Americans are showing us will become more and more important to funds, investment houses and banks worldwide, which means that the real estate industry, as one of the largest emitters, will make a significant contribution to decarbonization.

From 2027, the real estate sector will be integrated into the EU emissions trading system EU ETS, which has already been able to gain experience with Germany’s national emissions trading system nEHS since 2021. Currently, the voices are increasingly moving in the direction of not creating a second EU emissions trading system, but instead mapping the pricing with the normal EU ETS. By then, at the latest, properties that have not been renovated become expensive problem cases.

In the past week, prices for EU emission allowances have continued to move towards the 100-euro-mark as the auction volume is reduced due to the Easter holidays, compliance purchases before the 30/04/2023 be made and crude oil also posted a similar increase.

Technical seen, the next relevant resistance would be at 100 euro and there is currently no reason why this resistance should not be tested.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)90.48 EUR95.14 EUR+4.66 EUR
EUA (December-2023-Future)91.93 EUR96.66 EUR+4.73 EUR
VER (Natural Carbon Offsets)3.39 USD3.27 USD-0.12 USD
VER (CORISA eligible Carbon Offsets)2.07 USD2.18 USD+0.11 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)79.87 USD84.83 USD+4.96 USD
EURO (Currency, Forex)1.0841 USD1.0917 USD+0.0076 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