Emissions Trading / Carbon Market News (2018-12-24)

Dear Sir or Madam,

Dear Madam or Sir,

Although the year 2018 is not quite over yet, but of course the data collected so far by the German Weather Service (DWD) are sufficient for the statement that we had the warmest year in Germany since the beginning of the weather records. The previous record year of 2014 was exceeded by a further tenth degree of the full year average. But that’s not the only record, because with over 2000 hours of sunshine, 2018 was also the sunniest year. Particularly worrying, according to the vice-president of the DWD, Paul Becker, that eight of the nine warmest years since 1881 fall into the 21st century. He therefore summarized with the words: “The warming continues unchecked, the climate change holds Germany in a vice-like grip”.

But the year 2018 was also characterized by a dramatically positive price trend for CO2 emission certificates. The European Pollution Rights course moved from a level in the range of EUR 7.00 to EUR 7.50 at the beginning of the year to more than EUR 25.00 due to the decisions to reform the trading system. No analyst had seriously expected this rapid price increase, but rather a more gentle increase for the years between 2018 and 2021. For this reason, some market observers have significantly revised their forecasts upwards for the coming years.

By contrast, the price of oil had fallen by around 10 percent in the course of the last trading week. Here, both the economic concerns of investors and the market data themselves seem to play a decisive role.

(Average Quotes Exchange / OTC)      
Instrument 2018-12-14 2018-12-21 Change
EUA (Spotmarket) 23.36 EUR 24.88 EUR +1.52 EUR
EUA (December-2019-Future) 23.37 EUR 24.92 EUR +1.55 EUR
CER (Spotmarket) 0.25 EUR 0.24 EUR -0.01 EUR
ICE Brent Crude Oil (Benchmark Future) 60.11 USD 55.05 USD -5.06 USD
EURO (Currency, Forex) 1.1305 USD 1.1373 USD +0.0068 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. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into 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 or +44.20.79790283.

With kind regards,

Advantag Services GmbH