Emissions Trading / Carbon Market News (18/12/2023)

Dear Madam or Sir,

Since last week it has been clear how the German federal government wants to solve its billion-euro problem, namely by increasing revenue and reducing expenditure.

Two things now also directly affect the area of decarbonization, namely national emissions trading and the premium for electric cars.

For some time now, companies have not received a bonus as a subsidy for the purchase of electric cars and now the bonus will no longer apply to private individuals if they have not submitted the application by yesterday, Sunday.

It is right that the bonus will be cancelled because electromobility will become established anyway, just when you consider the follow-up costs after the purchase. But they are also cheaper to purchase than their combustion counterparts. Just compare a current Model 3 Long Range, which has a practical range of more than 500 km, two engines, 440 hp, all-wheel drive and can accelerate from zero to 100 km/h in four seconds with an adequate combustion engine you can quickly reach six figures. You can get the Tesla for just under 52,000 euros gross.

It is also true that the price of carbon emissions in the transport and real estate sectors is being raised, but the communication from politicians is extremely poor. For Federal Minister of Economics Robert Habeck, an increase of 50.0% to 45 euros instead of 33.3% is just a “slightly higher carbon price”. And Federal Finance Minister Lindner forgets that the tax relief he is citing primarily affects those who can already afford a heat pump and an electric car.

And the announced climate money, which was intended to relieve the burden on low and normal earners and alleviate social hardship, will no longer be achieved in this legislative period, as Habeck had already announced months ago.

The last auction on EEX for 2023 is taking place today and the new trading calendars for the EU emissions trading system and the national emissions trading system have not yet been published.

Last week, the prices for EU emissions rights moved further south in the narrow downward trend channel and fell by a substantial 3% on a weekly closing price basis. It will remain interesting to see how the price behaves in the auction-free weeks and whether the next support in the area around 64.50 initiates a trend reversal.

    (Average Quotes Exchange / OTC)       
EUA (December-2023-Future)68.63 EUR66.35 EUR-2.28 EUR
VER (Natural Carbon Offsets)1.09 USD0.37 USD-0.72 USD
VER (CORSIA eligible Carbon Offsets)0.70 USD0.58 USD-0.12 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)75.94 USD77.01 USD+1.07 USD
EURO (Currency, Forex)1.0768 USD1.0892 USD+0.0124 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