Emissions Trading / Carbon Market News (20/06/2022)

Dear Madam or Sir,

Despite the ongoing pandemic situation last year, emissions from Germany’s plants covered by the European emissions trading system EU ETS will be almost back to the pre-Corona level in 2021.

The energy sector in particular has contributed to this, with emissions rising for the first time since 2013. These were 14% or 235 million tonnes of CO2 higher than in the previous year, since more coal was used during the economic recovery despite higher CO2 prices. Ultimately, this has also led to a corresponding increase in electricity prices since then.

The emissions of the energy-intensive industry in Germany only increased moderately by 5% compared to the previous year, but they were almost at the pre-corona level.

After there were significantly fewer flight movements in 2020, the share of German aviation emissions rose last year by a fifth to 4.6 million tons of CO2.

Regarding the targets for reductions in the EU ETS (minus 43% compared to 2005 by 2030), Germany is currently 31%, visibly behind the European average of 38% compared to 2005. And at the European level, Germany was also the leader in increasing the Greenhouse gas emissions, which makes further efforts to ensure compliance with the Paris climate protection agreement by politicians urgently necessary.

After the reform proposal of the environment committee was rejected by a majority of the European Parliament two weeks ago, a new compromise proposal is now to be voted on Wednesday. Now the reduction factor should be more than 63% and the linear annual reduction factor 4.4% in 2024 and 4.6% from 2029 compared to the previously proposed 4.5%. This is currently 2.2%, after having been 1.74% in the third phase of EU emissions trading. In addition, the free allocation of emission rights is to expire in the years 2027-2032.

The market for EU emission allowances reacted with a moderate weekly gain of 51 cents in December futures. The vote on Wednesday will remain exciting.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)81.74 EUR82.24 EUR+0.50 EUR
EUA (December-2022-Future)81.86 EUR82.37 EUR+0.51 EUR
VCU (Voluntary Carbon Units ø)10.42 USD9.20 USD-1.22 USD
VER (Gold Standard Spotmarkt ø)4.62 USD4.45 USD-0.17 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)122.01 USD114.54 USD-7.47 USD
EURO (Currency, Forex)1.0515 USD1.0495 USD-0.0020 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