Emissions Trading / Carbon Market News (22/07/2019)

Dear Sir or Madam,

The world’s most northerly weather station in the North of Canada experienced a very unusual heatwave last week, recording a record high of 21 ° C. The station is located at 82 degrees north latitude and is the northernmost permanently inhabited place on earth. This heat wave causes fires of unprecedented proportions to erupt in the Arctic.

The current data on the use of fossil fuels for power generation show how CO2 emissions trading serves climate protection. As a result of higher prices, 11.5 million tonnes of energy were produced in June 2019; in June 2018 it was still 17 million tons. This is particularly related to the fact that the rise in CO2 allowances has led to more than 60% increase in electricity produced by gas-fired power plants from 2.3 to 3.7 billion kilowatt hours.

According to the Fraunhofer Institute for Solar Energy Systems (ISE), the cost of generating lignite-fired power was 30-40 euros per megawatt-hour due to high CO2 prices, while electricity from gas-fired power plants is 24 – 28 euros. This is pleasing insofar as electricity from gas generates only half as much CO2 as is the case with lignite. The more expensive the CO2 certificates are, the less CO2 is emitted in power generation. At prices that would be well above the 30-euro mark, coal-fired power plants would be unprofitable and shut down for this reason alone. That would precede the coal exit in 2038.

Last week, the EUA continued to be bullish, peaking at EUR 29.50 at the beginning of the week. However, whether the 30-euro mark is to be tested depends on a strong market environment in the energy sector, with crude oil in particular currently weakening. At the start of the week, the EUA again rose above the 29 euro mark.

(Average Quotes Exchange / OTC)      
Instrument 12/07/2019 19/07/2019 Change
EUA (Spotmarket) 28.76 EUR 28.85 EUR +0.09 EUR
EUA (December-2019-Future) 28.79 EUR 28.89 EUR +0.10 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 66.79 USD 62.52 USD -4.27 USD
EURO (Currency, Forex) 1.1269 USD 1.1220 USD -0.0049 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