Emissions Trading / Carbon Market News (17/06/2024)

Ladies and gentlemen,

Companies that are subject to the European Emissions Trading System (EU ETS) will be confronted with stricter conditions in the coming years. Both for existing installations and for companies that were/will be commissioned after 1 January 2023 or will be subject to the EU ETS 1 regulations from 1 January 2024 as a result of the amendment to the Emissions Trading Directive, the free allocations will be significantly reduced. New applications therefore had to be submitted for the so-called 2nd allocation period (2026-2030) within the fourth trading period. The German Emissions Trading Authority (DEHSt) would like to point out that the application deadline for all companies subject to emissions trading ends uniformly on Friday, 21 June 2024. Detailed information and explanations on the allocation rules and the application process can be found on the DEHSt website and in the relevant DEHSt guidelines.

On Monday of the last trading week, the carbon price initially fell to a daily low of slightly over 69 euro, its lowest level in almost a month. This drop is partly due to the results of the European elections, in which parties with less ambitious climate policy goals were able to make gains. The new formation of the European Parliament is expected to influence future climate and energy policy. Somewhat surprisingly, however, buying interest increased again in the afternoon, with the December contract closing at EUR 70.91.

The bulls then dominated the market until Thursday and the price tested the 72 euro mark several times until the bears took over again in the last few trading hours and the price fell back to the 70.50-euro range. Obviously, the financially strong players do not currently trust the CO2 certificate to jump above the 80-euro mark. The next Commitment of Traders report, which will be published on 19 June, is therefore eagerly awaited. The CoT report regularly analyses the trading activities of the major market participants, who generally have the most comprehensive market information, so that conclusions can be drawn about possible market movements from their actions.

On Friday of the past trading week, the downward trend from Thursday continued consistently and drove the price down to a six-week low and thus below the relevant support lines, which suggests that the negative trend will continue in the new trading week. This is all the more true as DEHSt has announced that the free allocation for the year 2024 will take place in June.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)71.39 EUR68.28 EUR-3.11 EUR
VER (Natural Carbon Offsets)1.03 USD1.01 USD-0.02 USD
VER (CORSIA eligible Carbon Offsets)0.37 USD0.34 USD-0.03 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)79.74 USD82.60 USD+2.86 USD
EURO (Currency., Forex)1.0817 USD1.0703 USD-0.0114 USD

(The VER quotes are average rates (carboncredits.com)., which can be used within the framework of CORSIA and voluntary carbon offsetting. 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