Emissions Trading / Carbon Market News (12/07/2021)

Dear Sir or Madam,

Last year, global carbon emissions fell more sharply within a year than they have since World War II, as the oil company BP published in a report.

The Covid-19 pandemic has significantly reduced economic activity globally and thus also the demand for fossil fuels.

Global emissions of CO2 or its equivalents (CO2e) amounted to 32.28 billion tons in 2020, a visible decrease of 2.1 billion tons or 6.3% compared to 2019.

Europe in particular recorded an above-average decline with over 12% to 3.59 billion tonnes. Here Greece led with minus 27%; Germany’s emissions, on the other hand, only fell by 11.5%.

But also in North America, 12% less was emitted, with the USA being one of the largest global emitters after China. China, on the other hand, even had an increase of 89 million tons or 0.6% compared to the previous year.

So if greenhouse-gas emissions could continue to decrease over the next 30 years as they did last year, global CO2 emissions would decrease by around 85% by 2050 and the Paris climate target of 2°C warming could still be achieved. However, it is unfortunately likely that the global economy and increased travel will lead to higher emissions again.

In particular, the decline in oil demand with a minus of more than 9% had an effect here. In particular, the demand for kerosene fell by 40% and for gasoline by 13%.

At the same time, electricity generation from wind and solar energy rose by 358 TWh, which was the largest annual increase. Of this, around half of the growth was recorded in China.

Not least, this meant that global consumption of coal could be reduced by 4.2% or 6 million tons compared to 2019. In Germany, coal consumption fell by a total of 18%, largely thanks to CO2 emissions trading.

This showed a small crash in the past week and thus offered good opportunities to cover your portfolio with EUAs. On Tuesday, the December contract fell significantly from EUR 58.31 to a low of 52.20; on Thursday the low was even at 50.87 euros. Towards the end of the trading week, however, prices recovered significantly and closed above the EUR 54 mark.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)57.24 EUR54.17 EUR-3.07 EUR
EUA (December-2021-Future)57.35 EUR54.26 EUR-3.09 EUR
CER (Voluntary Spot-Market ø)2.66 USD2.66 USD+0.00 USD
VER (Gold Standard Spotmarkt ø)14.99 USD14.99 USD+0.00 USD
ICE Brent Crude Oil (Benchmark Future)76.11 USD75.62 USD-0.49 USD
EURO (Currency, Forex)1.1864 USD1.1876 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