Emissions Trading / Carbon Market News (20/12/2021)

Dear Ladies and Gentlemen,

Unfortunately, 2021 will once again make it into the top 10 of the hottest years since weather data began to be recorded. According to projections, the uninterrupted series of record years that began in 2015 will continue again this year. Which place it will take in this inglorious ranking is beside the point. Regionally, numerous climate records were indeed broken again in 2021. According to calculations, land temperatures in the northern hemisphere were on average higher in autumn than ever before and the Arctic continues to warm more than twice as fast as the rest of the world.

In this context, the latest press release of the German Federal Environment Agency is alarming, which states that the share of renewable energies in total electricity consumption will decrease noticeably in 2021 and, after 45.3 percent in 2020, will only reach the level of 2019 with about 42 percent. While total electricity consumption increased, five percent less electricity was generated from renewable sources than in the previous year due to weather conditions. The statement went on to say that renewable electricity production has risen continuously since 1997. So far, individual years with less wind and sun have mostly been compensated for by the addition of new power generation plants. However, this was not the case in 2021, also because only little capacity was added in 2019 and 2020.

This closely follows last Friday’s report by the International Energy Agency (IEA) that global electricity generation from coal will reach an all-time high again this year. The reason for this is the global economic recovery, which is increasing demand for electricity faster than low-carbon energy sources can keep up.

The carbon market first did not find any new orientation last week and so prices moved relatively steadily sideways in a range between 80 and 85 euros. However, this changed on Friday. At the start of trading, the EUA’s initially moved significantly upwards, before they then suffered the biggest daily decline in euros ever. Apparently, despite immediate denials, traders had been spooked in part by the threat of intervention and realised their profits in the run-up to the reference futures contract expiring today. In the process, the price of the EUA’s fell by around EUR 11.50.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)83.73 EUR73.28 EUR-10.45 EUR
EUA (December-2021-Future)83.73 EUR73.28 EUR-10.45 EUR
VCU (Voluntary Carbon Units ø)8.86 USD7.98 USD-0.88 USD
VER (Gold Standard Spotmarkt ø)8.67 USD8.53 USD-0.14 USD
nEZ (German National Carbon Units)25.00 EUR25.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)75,30 USD73.08 USD-2.22 USD
EURO (Currency, Forex)1.1316 USD1.1237 USD-0.0079 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. VCUs and VERs are average prices (CBL markets). 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