Emissions Trading / Carbon Market News (25/07/2022)

Dear Madam or Sir,

The German Federal Ministry for the Environment published a study last week which came to the conclusion that drought, heat and heavy rain have caused damage of more than 80 billion euros in Germany alone in recent years.

Since 2000, an average of at least 6.6 billion in damage has occurred in Germany every year. In particular, the extraordinarily hot and dry summers of 2018 and 2019 and the flash floods and floods in July 2021 contributed 40 billion euros to this. Around 35 billion euros in damage was caused by the heat and drought in 2018 and 2019 alone. In addition, damage of around 5 billion euros was caused by isolated storm and hail events.

And if you look at the drought and heat waves of the summer of 2022 so far, with many days above 30°C, this year will also cause immense costs in Europe.

Uncertainty about gas supply and the European emergency plan sent prices for European carbon emission allowances plummeting in the past trading week. On a weekly close basis, they are down 10.3%, breaking through key chart technical support lines.

However, it currently looks as if the price is stabilizing in the area above EUR 76 and it would not be surprising if prices were to move back towards the EUR 80 mark in the short term.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)85.16 EUR76.36 EUR-8.80 EUR
EUA (December-2022-Future)85.38 EUR76.60 EUR-8.78 EUR
VCU (Voluntary Carbon Units ø)8.63 USD8.07 USD-0.56 USD
VER (Gold Standard Spotmarkt ø)3.74 USD3.35 USD-0.39 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)100.99 USD103.58 USD+2.59 USD
EURO (Currency, Forex)1.0064 USD1.0161 USD+0.0097 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