Emissions Trading / Carbon Market News (13/03/2023)

Dear Madam or Sir,

From the beginning of this millennium to 2021, at least 145 billion euros in damage has been caused in connection with climate change, as the German State Secretary for the Environment Christiane Rohleder summed up last week.

The majority of this, amounting to 80 billion euros, only occurred in the four years from 2018 to 2021 and the study puts the damage by the middle of the century at up to 900 billion euros. Added to this is damage that is difficult to measure financially, such as deaths from flooding and heat, as well as severe strain on ecosystems and further loss of biodiversity on our planet.

In order to mitigate this, the climate experts at the German National Academy Leopoldina presented a roadmap last week that is intended to accelerate the path of the economy towards renewable energies. To this end, the scientists have developed six main ideas.

One of the important issues is the completion of the EU emissions trading system EU ETS in the direction of a long-term trading system that includes all emitters as an important control system for compliance with the Paris climate protection agreement negotiated in 2015.

In addition, the technological removal of CO2 from the atmosphere, the expansion of a “green” hydrogen infrastructure, the expansion of digital electricity networks (smart grids), the expansion of renewable energies and a market-compliant and accelerated planning of the energy system conversion are important building blocks in the necessary decarbonization of Europe.

Prices in EU emissions trading system EU ETS have recovered over the past week from the previous week’s profit-taking and buyers have returned, taking the benchmark contract of EU emissions allowances (EUA-Dec-2023) back above 100 euros last Friday – technical driven.

If EUAs sustain above the resistance line of around EUR 100 this trading week, the next key technical resistance would be in the area of just over EUR 105. If this should not succeed, the next relevant support would be in the area around 92 euros.

The Leipzig EEX is auctioning a total of 11,842,500 EUA on all trading days this week. The weekly auctions for German national emission allowances nEZ also take place this Tuesday and Thursday.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)91.04 EUR98.22 EUR+7.18 EUR 
EUA (December-2023-Future)92.18 EUR99.80 EUR+7.62 EUR 
VER (Natural Carbon Offsets ø)3.45 USD3.52 USD+0.07 USD 
VER (CORISA eligible Carbon Offsets  ø)2.55 USD2.29 USD-0.26 USD 
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR 
ICE Brent Crude Oil (Benchmark Future)85.98 USD82.66 USD-3.32 USD 
EURO (Currency, Forex)1.0636 USD1.0640 USD+0.0040 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