Emissions Trading / Carbon Market News (20/02/2023)

Dear Madam or Sir,

Last Tuesday, as part of the “Fit for 55” climate package, the European Parliament decided to end the combustion engine in 2035, despite resistance from the conservative camp. An important reason for this is the goal of reducing CO2 in road traffic by 55% for cars and delivery vans by 50% by 2030. Most manufacturers in Europe have already announced in the past few months that they will no longer produce cars with combustion engines by that time at the latest to produce.

However, it is still unclear whether combustion engines with e-fuels will also be recognized as climate-friendly in the future. From our point of view, this will not make any sense from a purely commercial and physical point of view, since the energy required for production only achieves a fifth of the range of electric cars.

At the same time, however, one must let the charging infrastructure growing much faster, because there are already not enough fast charging stations at peak times, especially on the motorways.

EU allowance prices have gained 3.5% over the past week and peaked at EUR 98.45 (EUA December 2023 futures) on Friday, which was also a new six-month high.

The relatively mild temperatures in large parts of Europe could have a negative impact on price developments in the coming week. On the other hand, it could appear bullish that only 9,166,500 EUAs will be auctioned this week, 2,676,000 fewer than last week. In addition, more purchases will be made in the coming weeks to meet the obligation to surrender, which speculators could also use to bring prices above the 100 Euro mark.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)91.76 EUR95.02 EUR+3.26 EUR
EUA (December-2023-Future)93.03 EUR96.25 EUR+3.22 EUR
VCU (Voluntary Carbon Units ø)4.05 USD3.28 USD-0.77 USD
VER (Gold Standard Spotmarkt ø)2.37 USD2.17 USD-0.20 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)83.90 USD83.00 USD-0.90 USD
EURO (Currency, Forex)1.0677 USD1.0694 USD-0.0017 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