Emissions Trading / Carbon Market News (24/08/2020)

Dear Madam or Sir,

Last Wednesday, the German government approved the Climate Protection Report 2019. According to the report, total emissions in 2019 fell by almost 54 million tonnes of CO2 equivalents to around 805 million tonnes compared with 2018, which represents a reduction of 6.3 percent. Against the background of Germany’s greenhouse gas reduction targets, Germany has emitted around 35.7 percent less greenhouse gases in 2019 than in the reference year 1990. The Climate Protection Act stipulates a reduction of at least 35 percent by 2020 and at least 55 percent by 2030 (in each case compared to 1990). In accordance with the coalition agreement, the 2010 energy concept includes non-binding greenhouse gas reduction targets of 40 % for 2020. In the meantime, this mark seemed hardly achievable. However, as the current climate protection report now makes clear, in addition to the measures of the “Action Programme Climate Protection 2020”, in particular the EU emissions trading with significantly higher certificate prices has made a stronger reduction contribution than was expected six months ago. Moreover, as the report is limited to the year 2019, the effects of the Covid 19 pandemic could not yet be taken into account. If the actual greenhouse gas emissions for the year 2020 are significantly lower, the 40 percent target could still be achieved.

At the beginning of the past trading week, the price of EUAs received tailwind from the bullish energy complex and strong auction results and rose towards the 27 euro mark. Then, however, an unexpected server problem occurred on Wednesday, which shut down the entire emissions registry for the rest of the week. The European Commission stated in a commentary on Thursday that this technical problem could be solved by the end of the week, which was successfully implemented. However, the initial uncertainty about possible backgrounds and the fact that no physical trading could take place for days pushed the price down to a stable level below the 26 Euro mark.

  (Average Quotes Exchange / OTC)   
EUA (Spotmarket)25.45 EUR25.60 EUR+0.15 EUR
EUA (December-2020-Future)25.48 EUR25.65 EUR+0.17 EUR
CER (Spotmarket)0.29 EUR0.29 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)44.95 USD44.28 USD-0.67 USD
EURO (Currency, Forex)1.1840 USD1.1799 USD-0.0041 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.)

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With kind regards,

Advantag Services GmbH