Emissions Trading / Carbon Market News (11/10/2021)

Dear Sir or Madam,

The discussion about the high energy prices continued at the different platforms during the last trading week. The search for the causes poses a not inconsiderable challenge, because in an open, globally networked market, the connections between causes and effects can rarely be precisely depicted.

So, while some saw the sharp rise in the carbon price itself as the cause, other market observers tended to see the gas price as the driving force. And depending on this, corresponding political demands follow. Apparently, the EU Commission is considering both short-term regulatory intervention in the gas market and more sustainable strategies to contain energy prices. This, in turn, may have motivated Russian President Putin to speak loudly about increasing supply volumes. Poland, which is currently walking politically on the edge of a Polexit, wants a price cap on CO2 like a mantra, and voices are also getting louder here and there calling for access restrictions for speculators.

However, their influence is obvious as far as they are concerned. Of course, this is true in all sectors that speculators are discovering as a playground for themselves – and sometimes even with dramatic effects on entire economies and/or on the fate of individuals. There is no doubt that the speculative participants have recently helped to raise the carbon price to a level that influences environmentally relevant corporate decisions – a goal explicitly sought by the Paris Agreement.

Last Wednesday, however, the price of European pollution rights fell by around 9 percent amid huge trading volumes, driving the price from over 65 euros to below the 58-euro mark for a short time. This was of course a buy signal, especially for compliance companies, and so the price initially rose again a little. By the end of trading, however, the market had not really recovered from this correction and it remains to be seen when and at what pace the price will rise again.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)61.99 EUR58.29 EUR-3.70 EUR
EUA (December-2021-Future)62.04 EUR58.33 EUR-3.71 EUR
CER (Voluntary Spot-Market ø)3.50 USD3.50 USD+0.00 USD
VER (Gold Standard Spotmarkt ø)14.49 USD14.49 USD+0.00 USD
ICE Brent Crude Oil (Benchmark Future)79.14 USD82.50 USD+3.36 USD
EURO (Currency, Forex)1.1592 USD1.1580 USD-0.0012 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. CERs and VERs are average prices in the voluntary carbon offsetting market (eco securities). 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