Emissions Trading / Carbon Market News (19/02/2024)

Dear Madam or Sir,

Last week, the EU decided to support CO2-intensive industry, which is subject to levies in EU emissions trading EU ETS, with a total of four billion euros to reduce 60% of its carbon emissions within three years and 90% within 15 years. 

In addition, the German Federal Ministry of Economics has announced that Germany intends to have the EU emission allowances that are no longer needed due to the coal phase-out cancelled and therefore not transferred to the Market Stability Reserve (MSR). This would possibly have happened indirectly anyway, as the MSR will retire all allowances above its maximum quantity of 400 million EUAs from this year onwards. The exact amount is not yet known.

EU emission allowances have lost almost 30% since the beginning of this year, carbon credits used for the international aviation industry (CORSIA) have gained 29% after months of decline and voluntary carbon credits based on nature projects also appear to have bottomed out with an increase of 65%.

According to various analysts, the prices of voluntary emissions trading certificates will rise by several hundred and even thousand per cent in the coming years, which is why many funds and investors are already beginning to discover this asset class for themselves. However, good advice on which types of certificates could be among the most promising is essential here.

At the end of the week, EU emission allowances were relatively stable compared to previous weeks, falling by only 2.8%. The trading range of the December 2024 EUA futures was not particularly volatile either, with prices ranging between 55.41 and 59.05 Euro.

From a technical point of view, it would now be logical for the EUA to tackle the path above the EUR 60 mark this week, but in the absence of bullish impetus, a further decline could also be possible; after all, the delivery deadline has now been moved from the end of April to the end of September, which makes the usual bullish phase in the first quarter obsolete due to higher demand.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)58.79 EUR57.17 EUR-1.62 EUR
VER (Natural Carbon Offsets)1.42 USD1.50 USD+0.08 USD
VER (CORSIA eligible Carbon Offsets)0.78 USD0.76 USD-0.02 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)81.67 USD82.75 USD+1.08 USD
EURO (Currency, Forex)1.0782 USD1.0775 USD-0.0007 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