Emissions Trading / Carbon Market News (27/03/2023)

Dear Madam or Sir,

At the beginning of last week, the Intergovernmental Panel on Climate Change (IPCC) presented its synthesis report, which makes it unmistakably clear that we can hardly achieve the target set in the Paris Climate Protection Agreement of 2015 of limiting global warming to a maximum of 1.5°C compared to the pre-industrial age, since we have already arrived at 1.1°C.

According to the report, around 3.6 billion people already live in regions that will be particularly affected by climate change.

In order to still meet the 1.5°C target, global emissions would have to be reduced by almost half by 2030 compared to 2019, and by 65% until 2035. From today’s perspective, an illusory goal, since emissions have increased significantly again after Corona.

In particular, the Intergovernmental Panel on Climate Change emphasized that the average global surface temperature has never risen as quickly as it has since 1970 for at least 2,000 years. It should be mentioned that the world population has more than doubled since 1970 and an end to the increase is not yet in sight.

The liberal German governing party FDP, on the other hand, is convinced that carbon emissions trading alone will bring about the necessary reduction in greenhouse gases. FDP remains opposed to a speed limit in Germany and has now ensured that Germany is seen as breaking its word at EU level for undermining the 2035 ban on internal combustion engine vehicles. The fact that this looks like clientele politics, since synthetic fuels require a multiple of energy and thus costs for production, seems to be of secondary importance in the party that leads the German Ministry of Finance, which apparently also reflects the damage to Germany’s reputation at EU level applies.

EU emissions trading prices have been very volatile over the past week as fears of another financial crisis persist. The fears are being fuelled in no small part by fears that Deutsche Bank could run into trouble, which could spark a European conflagration.

After the prices of EU emission allowances had been relatively optimistic in the last week until Friday, they collapsed after the EEX auction on Friday, but still showed a small plus on a weekly closing basis.

In the new trading week, a total of 11,842,500 EUAs will be offered on the EEX on all five trading days and it will remain important this week how strong the demand at the auctions will be.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)86.03 EUR86.32 EUR+0.29 EUR 
EUA (December-2023-Future)87.29 EUR87.65 EUR+0.36 EUR 
VER (Natural Carbon Offsets)3.48 USD3.04 USD-0.44 USD 
VER (CORISA eligible Carbon Offsets)2.28 USD2.06 USD-0.22 USD 
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR 
ICE Brent Crude Oil (Benchmark Future)72.51 USD74.90 USD+2.39 USD 
EURO (Currency, Forex)1.0667 USD1.0735 USD+0.0068 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