Emissions Trading / Carbon Market News (11/07/2022)

Dear Madam or Sir,

The votes in the European Parliament last Wednesday regarding the classification of nuclear power plants and gas-fired power plants have now paved the way for classifying them as climate-friendly in accordance with the EU taxonomy regulation. Only 278 of the required 353 votes against were cast. It is extremely unlikely that this will now be prevented by the member states in the final vote. This classification now allows investors to invest in such technologies again. It remains to be seen to what extent this classification will negatively affect the further expansion of renewable energies in Europe.

The supply of gas is currently an urgent problem, as it is still not clear how security of supply in Germany and the other EU countries is to be guaranteed during the colder months of the year. In addition, the potential for social upheaval should not be underestimated, since low-income households in particular will hardly be able to cope with the already extremely high energy costs.

One of the reasons for the shortage of gas is the supply from Nord Stream I, which has been significantly reduced for weeks, which, according to Russian information, is due to technical problems. Since this morning, due to the installation of a turbine from Canada and further maintenance work, no gas has flowed through the pipeline for the scheduled 10 days. It remains to be seen whether, once the repairs have been completed, gas will again be supplied.

The Euro fell to a 20-year low of USD 1.0072 last Friday in the face of European problems linked to energy supply insecurity. The financial markets are also reacting bearishly, so it is no wonder that concerns about the economy are contributing to the fact that the prices for European emission certificates are also showing losses compared to the previous week, which, however, can be described as moderate in view of the negative environment.

In the coming week, auctions for a total of 8.8 million EUAs will take place at the Leipzig EEX, which is 2.7 million fewer emission allowances than in the following week.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)85.37 EUR82.55 EUR-2.82 EUR
EUA (December-2022-Future)85.58 EUR82.79 EUR-2.79 EUR
VCU (Voluntary Carbon Units ø)8.85 USD8.83 USD-0.02 USD
VER (Gold Standard Spotmarkt ø)4.11 USD3.96 USD-0.15 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)111.55 USD107.05 USD-4.50 USD
EURO (Currency, Forex)1.0424 USD1.0182 USD-0.0242 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