Emissions Trading / Carbon Market News (14/12/2020)

Dear Sir or Madam,

In September the European Commission proposed that greenhouse gas emissions in the EU should be reduced by at least 55 percent by 2030 compared to 1990 levels. The previous goal was 40 percent. The new target was based on a comprehensive impact assessment of the social, economic and environmental impacts. This showed that 55 percent fewer emissions are realistic and feasible. The new climate target is now intended to help support Europe’s economic recovery from the coronavirus pandemic.

Even if critics do not go far enough, the European Union has set a milestone with today’s decision and has ended the use of fossil fuels for energy generation in the medium term.

And yes, it would be naive to call for further reductions, because the necessary transformation of society in the post-corona society of Europe will already unsettle quite a few people and without the willingness of the masses to implement any plan, however good it may be, would fail miserably . One only has to think of the cheap populists who are already in the starting blocks to classify climate change as an ideology and to present scientific evidence as unproven despite the greatest possible international consensus.

It was by no means a matter of course that an agreement could take place at EU level, it required a lot of debates and culminated in a night of negotiations, since every EU nation naturally pursues its own interests and still has to be taken along. The German Chancellor Angela Merkel and the French President Emanuel Macron were among the most important supporters, who ultimately prevailed.

As with all urgent EU decisions, a very significant point was the question of funding. Here, the EU fund with 750 million is intended to pave the way to a more sustainable and European economy.

In the run-up to this decision, the market for European CO2 emission rights has positioned itself clearly bullish and set an exclamation mark on Friday last week with an all-time high of 31.30 euros per EUA and this was already exceeded again in today’s early trading.

The market also sees the fact that the Brexit negotiations, which should be concluded by yesterday, are being extended as positive. Only the renewed lockdown in Germany and the failure of the Brexit negotiations are among the factors this week that could put a stop to the bullish market events.

Today, Monday, the last 3,959,500 EUAs for this year will be auctioned at the Leipzig EEX.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)30.11 EUR30.48 EUR+0.37 EUR
EUA (December-2020-Future)30.11 EUR30.52 EUR+0.41 EUR
CER (Spot-Market)0.30 EUR0.31 EUR+0.01 EUR
ICE Brent Crude Oil (Benchmark Future)49.06 USD49.96 USD+0.90 USD
EURO (Currency, Forex)1.2122 USD1.2108 USD-0.0014 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