Emissions Trading / Carbon Market News (21/05/2024)

Dear Sir or Madam,

The Mercator Research Institute on Global Commons and Climate Change (MCC), headed by Professor Ottmar Edenhofer, has analysed in a global meta-study how strong the influence of carbon pricing is on the decline in greenhouse gas emissions. From almost 17,000 relevant studies, 80 seriously relevant studies were identified and analysed with the help of neural computer technology.

The conclusion is that a reduction in emissions of between 5 and 21 per cent was already achieved in the first few years after the start of pricing, depending on the control effect and the level of pricing.

As the building and transport sectors in particular cause high CO2 emissions, consideration is already being given at EU level to whether the EU ETS2, which prices these sectors across the EU, could be launched earlier rather than in 2027.

However, in order to provide affected companies with a form of price hedging now, regardless of the start of EU ETS2, scientists and analysts recommend building up a carbon portfolio with certificates in EU ETS1 and investing in EUAs now.

We would be happy to advise you on these matters and manage your optimal procurement strategy.

Last week, EU emission allowances recorded a loss of just over one euro on a weekly closing price basis. EUAs tended to move sideways throughout the entire trading week, supported by the 38-day line.

Yesterday, Monday, however, the emission rights showed renewed strength and broke through two technical resistance levels as well as the 200-day-line, ending the first trading day of this week at EUR 74.22 in the benchmark contract.

If the bullish trend continues this week, the next technical resistances would be around EUR 80 and EUR 87, the 200-day-line would now be a support at the current EUR 72.68, followed by the 38-day-line at EUR 69.31, which should cross the 200-day line shortly.

“The trend is your friend”, as the saying goes among stockbrokers, and this currently appears to remain bullish after many months of politically favoured price declines.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)71.91 EUR70.69 EUR-1.22 EUR
VER (Natural Carbon Offsets)1.01 USD1.09 USD+0.08 USD
VER (CORSIA eligible Carbon Offsets)0.44 USD0.42 USD-0.02 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)82.62 USD84.,30 USD+1.68 USD
EURO (Currency, Forex)1.0757 USD1.0765 USD+0.0008 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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.

With kind regards,

ADVANTAG Services GmbH