Emissions Trading / Carbon Market News (22/03/2021)

Dear Sir or Madam,

Last week, the German Federal Environment Agency, together with the Federal Environment Ministry, announced the preliminary figures for Germany’s greenhouse gas emissions.

Germany emitted a total of around 739 million tons of CO2e last year, which was around 70 million tons less than in 2019, a decrease of 8.7%.

Thus, thanks to the help of the corona pandemic and the associated decline in the transport and industrial sector, with 40.8%, Germany still met the target of 40% emissions reduction compared to the reference year 1990. Insofar as Germany does not exhaust all options to take additional measures to reduce emissions, it remains to be feared that emissions will rise sharply again after the corona crisis has tapered off.

Due to the sharp rise in prices in EU emissions trading, however, CO2 has also been successfully saved in the energy sector, since the generation of electricity from coal, which is particularly harmful to the climate, has become increasingly unprofitable and is being replaced by gas in addition to renewable energies.

A decrease of around 38 million tons of CO2 was achieved here, which means a decrease of 14.5% compared to 2019. At around 221 million tons of CO2, the emissions were clearly below the annual emission volume of 280 million tons permitted in the Federal Climate Protection Act. The generation of electricity from lignite fell by 23 million tons and the generation of electricity from hard coal fell by 13 million tons of CO2.

The transport sector fell by 11.4% to 146 million tons of CO2 and the industrial sector by 4.6% to 178 million tons. Agriculture also reduced its emissions by 2.2% to 66 million tons of CO2 or its equivalent (CO2e), and the waste sector also made its contribution with a minus of 3.8%.

However, emissions in the building sector fell comparatively little by just 2.8% to 120 million tons of CO2e. The effects of the increase in home office can be seen here, as household emissions have risen slightly. The upper limit of 118 million tons resulting from the Climate Protection Act was exceeded by two million, which makes further savings necessary in this sector in particular, which is to be promoted by the national emissions trading, which came into force this year.

The prices in the European emissions trading system EU ETS rose again in the last week of trading and, in addition to the DAX, showed that they are also capable of repeated all-time highs. This record was set on Thursday at 43.77 in the December contract and trades above the 44 mark were already reported on the spot market. Towards the end of the last week of trading, the futures market closed just below 42 euros due to profit-taking; the CERs increased significantly to EUR 0.44 with a view to the approaching end of the submission period for 2020.

In any case, it will be exciting to see how the prices will move towards the submission deadline, as there are still some system operators who have not yet decided to buy due to the high price level. Should the bulls continue to hold the scepter in their hands, this reluctance could turn out to be very expensive due to the current bull market.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)42.79 EUR41.85 EUR-0.94 EUR
EUA (December-2021-Future)42.85 EUR41,97 EUR-0.88 EUR
CER (Spot-Market)0.39 EUR0.44 EUR+0.05 EUR
ICE Brent Crude Oil (Benchmark Future)69.21 USD64.52 USD-4.69 USD
EURO (Currency, Forex)1.1952 USD1.1905 USD-0.0047 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.

With kind regards,

Advantag Services GmbH