Dear Sir or Madam,
In recent weeks, the topic of price developments for fossil fuels following the introduction of EU ETS II in 2027 has been repeatedly taken up by the press. Since journalists tend to copy each other, most reports had the aim of scaremongering about exorbitantly rising petrol and diesel prices.
By and large, most media outlets wrote about price increases of 38 to 40 cents for a litre of petrol, diesel or heating oil from 2027, and a price of 200 to 300 euros per tonne of CO2 was expected for CO2 emission certificates.
Now, a few days ago, Prof. Dr. Alexander Eisenkopf from the Zeppelin University in Friedrichshafen has brought a completely different possibility into play. In the coming year, the fixed price phase in Germany’s national emissions trading will end and prices will move in a corridor of 55 to 65 euros.
Since the European Union has also built a market stability reserve into the EU ETS II for reasons of social compatibility and is aiming for a target price of 45 euros per tonne, at least at the beginning in 2027, Professor Eisenkopf sees a high probability that fuel prices in Germany could even fall slightly as a result of the falling prices for CO2.
Our scenario for the introduction of the EU ETS II initially predicts a high probability of very volatile prices until supply and demand settle into a realistic price corridor. In the long term, we also expect prices to rise, but a sharp increase to up to €300 per tonne is rather unlikely.
However, since the distributors of fossil heating and combustion fuels need a correspondingly profitable margin calculation, there is also the possibility that a higher price could be charged at petrol stations in the first few weeks until competitive prices prevail.
Based on our many years of experience in fundamental market analysis and chart analysis in other energy and commodity markets, particularly in the EU ETS I, we will be happy to assist you.
Last week, prices for emission rights in the EU ETS I continued to move up in an upward channel that began two weeks ago, supported by the market environment, and closed with a slight gain of 0.65% on a weekly basis despite profit-taking by institutional investors.
The EUA benchmark contract for December 2025 moved in a range of €69.59 to €74.23, but was stopped by a resistance line, which is currently slightly above the €74 mark. Should the market environment remain bullish, this barrier could be broken and the way towards €80 would be clear. If the resistance holds, the EUA could also fall back below the 70-euro mark.
This week, the Polish Wednesday auction is off again, which is why only 11,343,500 EUAs will be auctioned on the other four days, compared to 13,416,000 last week.
| (Average Quotes Exchange / OTC) | |||
| Instrument | 14/03/25 | 21/03/25 | Change |
| EUA (December-25-Future) | 70.99 EUR | 71.45 EUR | +0.46 EUR |
| nEZ (national Emission Allowances (D)) | 55.00 EUR | 55.00 EUR | +0.00 EUR |
| UKA (December-25-Future (UK)) | 44.29 GBP | 46.24 GBP | +1.95 GBP |
| UK Natural Gas (December-25-Future) | 104.52 GBP | 109.03 GBP | +4.51 GBP |
| ICE Brent Crude Oil (December-25-Future) | 67.81 USD | 69.05 USD | +1.24 USD |
| EURO (Forex) | 1.0879 USD | 1.0816 USD | -0.0063 USD |
(EUA. UKA, Natural Gas, 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 emission allowances 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,
Your Advantag – Team