Emissions Trading / Carbon Market News (13/07/2020)

Dear Madam or Sir,

Traders and analysts still rub their eyes when they look at the price development on the CO2 market since the end of June. After the price for European pollution rights on the London ICE passed the 29-euro mark in no time at the beginning of the last trading week, the all-time high on Tuesday came within reach. Now one could have expected a price around 30 euros – but only towards the end of the year and above all without the influence of a pandemic. The suspicion that the CO2 market was being artificially driven up by speculative traders, for example by hedge funds, quickly became more and more widespread, which is why some states apparently brought new regulations such as price caps to curb speculation into discussion. In fact, the price then left its unstoppable upward trend, albeit without a clear correction. Since then, the price has oscillated in a broad corridor, but at the end of the week it moved up again significantly. Even if a high CO2 price is indeed the declared goal of the European Trading System, such an influence by extraneous speculators can of course not be desired.

Meanwhile, last week, the EU adopted rules for the so-called modernisation fund, which is intended to promote investment in the modernisation of the energy sector in general and energy efficiency in lower-income Member States. The fund will be endowed with EUR 14 billion from ETS revenues.

A look at the start of the new trading week reveals a significantly strengthened CO2 price, which seems to be heading for its all-time high again.

  (Average Quotes Exchange / OTC)   
EUA (Spotmarket)27.89 EUR28.96 EUR+1.07 EUR
EUA (December-2020-Future)27.96 EUR29.02 EUR+1.06 EUR
CER (Spotmarket)0.27 EUR0.28 EUR+0.01 EUR
ICE Brent Crude Oil (Benchmark Future)42.78 USD43.20 USD+0.42 USD
EURO (Currency, Forex)1.1245 USD1.1305 USD+0.0006 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. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into EUA. 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