Emissions Trading / Carbon Market News (14/02/2022)

Dear Madam or Sir,

Already during the coalition negotiations of the current government of the Federal Republic of Germany, Annalena Baerbock, as designated Foreign Minister, demanded that international climate policy was to be placed in her ministry. In fact, Baerbock thus took on an enormously important, additional responsibility, which is a mammoth task not only because of the current foreign policy challenges.

Against this background, one should understand the announcement that one of the world’s most high-profile environmental activists is to move to the Foreign Ministry on 1 March. The US-American and former head of Greenpeace, Jennifer Morgan, is to serve first as special envoy and then as state secretary (for which German citizenship is still required) as a hub between the German ministries, but above all as a link between the international environmental departments and climate activists worldwide. This also means that Germany will be represented at upcoming climate conferences either by the Foreign Minister or by the former head of Greenpeace. This represents an immense political upgrading of this already highly significant issue.

Exciting was as well the situation on the carbon market in the past trading week. On the way to the 100-euro mark, a proposal by MEP Peter Liese to release allowances held in the MSR and to lower the threshold at which the so-called 29a mechanism (measures in case of excessive price fluctuations) was triggered burst. Such and similar interventions to control sudden price spikes in the ETS have been more or less actively discussed for a year now, ever since it became clear that hedge funds have a stake in the sharp price increases of EUAs.

But emission allowances have already recovered, recouping almost half of the week’s losses, as compliance buyers took advantage of the moment. Previously, the reference price had briefly fallen below the 90-euro mark. However, the price remained within the upward trend channel, suggesting a further recovery and a renewed attack on the 100-euro mark. Energy prices also continued to rise, not least due to the tensions in connection with Ukraine.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)96.03 EUR92.45 EUR-3.58 EUR
EUA (December-2022-Future)96.45 EUR92.87 EUR-3.58 EUR
VCU (Voluntary Carbon Units ø)8.40 USD10.02 USD+1.62 USD
VER (Gold Standard Spotmarkt ø)8.00 USD9.00 USD+1.00 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)92.80 USD94.86 USD+2.06 USD
EURO (Currency, Forex)1.1131 USD1.1352 USD+0.0221 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. VCUs and VERs are average prices (CBL markets). 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.)

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With kind regards,

Advantag Services GmbH