Emissions Trading / Carbon Market News (17/10/2022)

Ladies and Gentlemen

Greta Thunberg, who at just 19 has already become the icon of the global climate movement, gave a remarkable interview to German television last week and received widespread acclaim for her nuanced and considered remarks. In essence, the young activist called for nothing less than a cultural change: “The longer we delude ourselves that we can solve the climate emergency within the existing system without treating it like a real crisis, the more time we will lose.” She cited the Corona measures as a comparison. These had impressively demonstrated that mankind was indeed capable of responding appropriately to a global emergency and managing it. In general, people have even accepted significant personal restrictions in their lives for this purpose, and this is also because the media have reported on the dangers and the decided countermeasures 24/7. This has had a great influence on political decisions as well as on the acceptance of the population. But this is far from being the case with climate change. The most important thing, therefore, says Thunberg, is to “recognise that we are in an emergency, otherwise everything else is useless!”

Of course, she would remain a climate activist for life, but actually we need billions of climate activists who understand climate change as a real crisis and act accordingly. In this context, she quoted the UN Emissions Report, according to which “by 2030 we will be using twice as much fossil energy as would be compatible with the 1.5-degree target and we are already at 1.2 degrees today”.

John Ploegg, a distinguished analyst, recently pointed out another important aspect: he warned that clean energy production technologies also require many raw materials, including rare earths. The electronic controls, storage systems, electric motors and transformation technology related to renewable energy rely on metals such as copper, lithium, nickel and cobalt, as well as the rare elements gallium, germanium, indium, tellurium and numerous platinum group elements. However, many of these metals are mainly found in countries with higher geopolitical and social risks. It is therefore necessary to adapt to this at an early stage in order not to fall into a new dependency trap.

The carbon market again had a sideways movement last week, with December future rallying to €69.50 on Thursday, but falling again in a narrow range on Friday. The market laments the lack of real signals from politicians regarding possible planned interventions in the ETS. Analysts, meanwhile, have estimated that it could take four years for EUA prices to recover to recent levels if REPowerEU sales were to take place.

Oil prices were similarly disoriented, as the market was spoilt for choice between announcements about supply curbs on the one hand and an oil price cap on the other. Half of the significant gains from the previous week were given back.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)68.55 EUR67.95 EUR-0.60 EUR
EUA (December-2022-Future)68.66 EUR68.03 EUR-0.63 EUR
VCU (Voluntary Carbon Units ø)8.61 USD7.89 USD-0.72 USD
VER (Gold Standard Spotmarkt ø)3.76 USD3.76 USD+0.00 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)97.92 USD91.80 USD-6.12 USD
EURO (Currency, Forex)0.9742 USD0.9721 USD-0.0021 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