Emissions Trading / Carbon Market News (16/08/2021)

Dear Sir or Madam,

The current report of the Intergovernmental Panel on Climate Change has made it abundantly clear that every conceivable human effort must be made to curb carbon emissions. Those who are concerned about the economy and the financial future must first and foremost strive for the fastest possible climate neutrality. The radical rethinking that scientists have long been calling for is the basic requirement for radical changes in behavior – but we are finding it extremely difficult to do so.

The pricing of carbon is supposed to act here as both an incentive and a means of exerting pressure. However, current figures indicate that this alone will not be enough. After the price of the European pollution rights set course for the 60-euro mark at the beginning of July, there was a significant correction shortly afterwards, which caused the price to fall to 50 euros. Now, one could conclude that a carbon price at this level is still effective in terms of climate policy, which is basically true. However, at the same time, due to various circumstances, there was an unusual increase in the price of natural gas, so that the financial advantage in favor of gas-fired power generation no longer existed. According to calculations, the carbon price would have had to rise to 80 euros at times so that energy from coal firing no longer remained the cheaper option. Apart from that, it is of course also extremely important that, firstly, there is always more than enough natural gas available (because supply and demand regulate the price, and security of supply must also be guaranteed), and secondly, renewable energies and the necessary grids are being developed at full speed.

A thoroughly comparable effect can be observed on German roads. Despite all the warnings, the number of new SUV registrations continues to rise continuously – in the first half of 2021 alone, every fourth car newly registered in Germany was an SUV.

During the past trading week, the carbon market presented a mixed picture. After a quiet start, however, the price was able to overcome the 58 euro mark again on Wednesday, before profit-taking led to a correction in the direction of 55 euros. Currently, the market is starting the new trading week optimistically.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)56.65 EUR55.39 EUR-1.27 EUR
EUA (December-2021-Future)56.66 EUR55.38 EUR-1.28 EUR
CER (Voluntary Spot-Market ø)2.66 USD2.66 USD+0.00 USD
VER (Gold Standard Spotmarkt ø)14.99 USD14.99 USD+0.00 USD
ICE Brent Crude Oil (Benchmark Future)70.43 USD70.14 USD-0.29 USD
EURO (Currency, Forex)1.1761 USD1.1796 USD+0.0035 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. CERs and VERs are average prices in the voluntary carbon offsetting market (eco securities). 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