Emissions Trading / Carbon Market News (19/06/2023)

Dear Madam or Sir,

Climate change is causing longer and longer periods of drought, even in countries that just a few decades ago were not struggling with it nearly as frequently and intensively. Especially in areas with shallow-rooted conifers, it is easy for forest fires to spread during dry periods.

In the Brandenburg town of Jueterbog, south of Berlin, Germany, a forest fire that lasted for days burned down an area of 733 hectares, and the fire brigade also had to be deployed several times on the Lower Rhine due to the persistent drought.

However, the more than 400 forest fires in Canada are currently particularly devastating. A sad record, since summer has only just begun. So far, the Canadian wildfires have destroyed nine million hectares of forest, releasing vast amounts of CO2 that have been stored in their wood. Canada’s forests collectively store more than 200 billion tons of CO2, which is about 11% of the world’s total.

Anyone who has seen the images from New York City, in which the city is enveloped in a gigantic cloud of orange smoke, might be reminded of apocalyptic science fiction films. The health consequences for Americans in smoke-pervaded areas range from lung disease to heart attacks and strokes.

The climate conference held in Bonn last week, which was held in preparation for the world climate conference beginning in Dubai at the end of November, was of little help in the fight against global warming. It can also be doubted that the leadership of an oil state would result in solutions that would promptly lead to a sharp reduction in the consumption of fossil fuels such as oil and gas.

The prices for EU emission allowances rose significantly last week for the second time in a row based on the weekly closing price and have remained stable above the EUR 90 mark. If the market continues to be bullish this week, the next strong technical resistance would be in the  EUR 99 area. However, in case of any profit taking, the EUR 90 level could be broken back down, although there are some support lines just below the EUR 91 level.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)85.50 EUR91.21 EUR+5.71 EUR 
EUA (December-2023-Future)86.79 EUR92.35 EUR+5.56 EUR 
VER (Natural Carbon Offsets)1.52 USD1.52 USD+0.00 USD 
VER (CORSIA eligible Carbon Offsets)0.82 USD1.11 USD+0.29 USD 
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR 
ICE Brent Crude Oil (Benchmark Future)74.92 USD76.42 USD+1.50 USD 
EURO (Currency, Forex)1.0748 USD1.0941 USD+0.0193 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