Emissions Trading / Carbon Market News (26/02/2024)

Dear Madam or Sir,

In 2023, the 1.5°C target of the Paris Climate Change Conference was broken and January 2024 was also the warmest January ever on record.

Even if some of the current warming can be attributed to the El Niño phenomenon, which began in the summer of 2023, the deviation from the average temperature is striking and it is currently not foreseeable that there will be a reduction in the global temperature rise.

And in the summer of 2024, La Niña appears to directly follow El Niño, with a stronger trade wind from South America towards the equator pushing the warm surface water further west towards Australia and Southeast Asia. This causes more cold water to rise from the depths in the south-east Pacific. As a result, there will be droughts in South America and significantly more precipitation in South-East Asia and Australia.

Even if it sounds far away, the change from El Niño to La Niña can also have an impact in Europe in the form of extreme weather events, which are favoured by the significantly higher average temperature.

In order to mitigate further global warming, it is important to have a functioning emissions trading system that is well controlled by high prices.

However, prices in EU emissions trading continued their bearish trend last week and headed south towards the EUR 50 mark. The persistent weather, which is clearly too mild for the time of year in Europa, and the associated reduction in the use of fossil fuels have further reduced demand and caused the price to slump by a further 8.7% at the end of the week.

As temperatures are also expected to remain relatively mild in the coming days, a counter-reaction can only be expected if there are unforeseen bullish impulses and the buying side becomes more visible.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)57.17 EUR52.22 EUR-4.95 EUR
VER (Natural Carbon Offsets)1.50 USD1.51 USD+0.01 USD
VER (CORSIA eligible Carbon Offsets)0.76 USD0.84 USD+0.08 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)82.75 USD80.95 USD-1.80 USD
EURO (Currency, Forex)1.0775 USD1.0817 USD+0.0042 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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