Emissions Trading / Carbon Market News (25/05/2020)

Dear Madam or Sir,

The German federal cabinet passed two important regulations last Wednesday to implement the Conciliation Committee’s decisions on the 2030 climate protection program. In December 2019, the federal government and the federal states agreed, among other things, to increase the CO2 pricing of fuels from the coming year, but in return to reduce the burden on electricity consumers and commuters. National emissions trading will therefore start at a fixed CO2 price of 25 euros per tonne in 2021, although this price level was only originally planned for 2023. In addition, the Federal Cabinet has passed a regulation that can be used to use income from national emissions trading to relieve the EEG surcharge.

According to the Federal Environment Agency, a gross price of EUR 25.00 per ton corresponds to 7 cents per liter of gasoline, 8 cents per liter of diesel, 8 cents per liter of heating oil and 0.5 cents per kilowatt hour of natural gas. By 2025, the prices of national CO2 certificates will now rise to 55 euros in the form of a fixed price. And from 2026 the price of the certificates will then be determined through auctions and the secondary market; a range of 55 euros to 65 euros per ton of CO2 is to apply in 2026.

The national German emissions trading system is being introduced in addition to EU emissions trading for large industrial plants and power plants, and records all fuel emissions that are not already subject to a CO2 price in EU emissions trading – regardless of the sector in which the fuels are used. Around 350 companies in particular will be affected by the trade, which put fossil fuels and heating agents on the German market.

The prices of allowances in EU emissions trading rose again visibly last week and, after the important 20-euro mark, also left the 21-euro mark behind. The ongoing recovery on the stock markets and the energy markets as well as the holiday auction-related reduced auction volumes supported price formation. Also this week, due to the Spring Brake Holiday, only 8.5 million EUA will be auctioned on Tuesday, Thursday and Friday, and Whit Monday will also be canceled in the coming week, which is why only 13.9 million EUA will be auctioned.

  (Average Quotes Exchange / OTC)   
EUA (Spotmarket)19.47 EUR21.32 EUR+1.85 EUR
EUA (December-2020-Future)19.52 EUR21.40 EUR+1.88 EUR
CER (Spotmarket)0.32 EUR0.30 EUR-0.02 EUR
ICE Brent Crude Oil (Benchmark Future)32.86 USD36.04 USD+3.18 USD
EURO (Currency, Forex)1.0820 USD1.0901 USD+0.0081 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