Emissions Trading / Carbon Market News (14/11/2022)

Dear Madam or Sir,

Yesterday was half-time at the 27th World Climate Conference in Sharm el-Sheikh. The first week focused on the topic of “Loss and Damage”, which is about financing poorer nations that are particularly affected by climate change.

An important means here should be carbon certificates, which the largest greenhouse gas emitters have to acquire and that income has to be distributed to the corresponding regions, because the financial damage to be quantified amounts to up to 580 billion US dollars annually until 2030 according to a study and should grow up to $1.7 trillion by 2050.

A total of 45,000 participants are expected in Egypt by the end of next week, among whom will be politicians and other state officials, non-governmental organizations but also 636 fossil fuel lobbyists, a quarter more than last year in Glasgow.

Also last week, the EU member states agreed that the sectors that are not yet subject to EU emissions trading must reduce their greenhouse gas emissions by 40% till 2030 compared to 2005, to keep the 1.5°C target of the Paris climate protection agreement still achievable for the EU.

Economically strong EU countries such as Germany have higher reduction targets of 50% than poorer countries such as Bulgaria, whose target is a 10% reduction. Failure to meet these targets will result in financial sanctions.

A so-called Effort Sharing Regulation (ESR) is intended to make greenhouse gas reductions mandatory for the EU member states and sets national targets for the sectors of agriculture, waste management, road traffic and buildings.

Germany is currently coordinating the measures to be taken by 2030 in the immediate climate protection program and has implemented the goals of the EU climate protection regulation in the national amended climate protection law, whereby the federal government has tightened the climate protection requirements accordingly and set the goal of greenhouse gas neutrality by 2045. By 2030, emissions are to be reduced by 65 percent compared to 1990.

Prices for European emission allowances (EUA) in the December-2022 benchmark futures contract have ranged between EUR 70.50 and EUR 79.50 over the past week, ending at 75.84. On a weekly closing basis, they lost EUR 0.52.

This week, 602,000 emission allowances for the aviation industry (EUAA) will be auctioned at the Leipzig EEX on Wednesday, and a total of 9,393,000 EUAs on the remaining trading days.

The last two auction dates for national emission certificates (nEZ 2022) will take place on December 6th and 8th, 2022.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)76.32 EUR75.81 EUR-0.51 EUR
EUA (December-2022-Future)76.36 EUR75.84 EUR-0.52 EUR
VCU (Voluntary Carbon Units ø)8.07 USD5.48 USD-2.59 USD
VER (Gold Standard Spotmarkt ø)3.21 USD3.33 USD+0.12 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)98.60 USD95.92 USD-2.68 USD
EURO (Currency, Forex)0.9960 USD1.0354 USD+0.0394 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