Emissions Trading / Carbon Market News (23/01/2023)

Dear Madam or Sir,

One hears again and again that Germany and the EU are the only countries fighting for more global climate protection, followed by the argument that this is anti-business and that we alone cannot save the world. So today we bring a positive example from one of the most important oil-producing countries in the world.

The Abu Dhabi National Oil Company (ADNOC) is investing US$15 billion in carbon reduction projects by the end of this decade to reduce its own operational emissions and meet its own decarbonization goals.

In particular, carbon capture and storage (CCS) projects, new, cleaner energy solutions (hydrogen and renewable energies), further electrification of the company, measures to prevent routine gas flaring and the establishment of international partnerships for climate protection.

The United Arab Emirates (UAE) is committing a total of US$165 billion to the clean energy transition. They are the first Persian Gulf state to aim for net-zero emissions by 2050, a remarkable achievement for an oil state.

In addition, the AirCarbon Exchange (ACX) has partnered with the Abu Dhabi Global Market (ADGM) to create the world’s first carbon-neutral international financial hub and regulated trading venue for carbon credits. Among others, the Leipzig EEX is involved in the ACX. Advantag is also a commodity exchange member on the ACX, where tokenized trading for carbon emission certificates for international aviation (CORSIA) takes place.

On the market for EU emission allowances, EUAs continued to recover last week and gained 6.5% on a weekly closing basis. The main drivers were the cold temperatures in Central Europe, rising gas and oil prices and the breach of a technical resistance on Wednesday. It will be interesting to see if the EUAs will move further towards EUR 90 this week or if there will be some profit taking by speculative market participants.

This week sees the first auction of emissions allowances for the aviation industry this year; on Wednesday 775,500 EUAA are offered. On the other trading days of the week, a total of 9,166,500 EUAs are auctioned.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)78.09 EUR83.39 EUR+5.30 EUR
EUA (December-2023-Future)79.86 EUR85.08 EUR+5.22 EUR
VCU (Voluntary Carbon Units ø)2.80 USD2.91 USD+0.11 USD
VER (Gold Standard Spotmarkt ø)2.89 USD2.79 USD-0.10 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)85.44 USD87.71 USD+2.27 USD
EURO (Currency, Forex)1.0831 USD1.0855 USD+0.0024 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. The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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