Emissions Trading / Carbon Market News (27/05/2024)

Ladies and Gentlemen,

Carbon pricing instruments currently cover around a quarter of global greenhouse gas emissions. There are currently 75 carbon taxes and emissions trading systems worldwide, and the trend is rising.

According to a report by the World Bank, revenue from carbon pricing reached record levels last year, exceeding the USD 100 billion mark for the first time. More than half of the funds flowed directly into climate and nature conservation programmes.

In our view, the introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM) will also lead to the introduction of carbon trading systems in other countries, which will have a stronger local steering effect so that the funds generated in this way can be used in the respective country and not channelled into the revenues of the EU Emissions Trading Scheme.

In the last trading week, the price of carbon emission allowances in EU Emissions Trading System rose by almost five euros or nearly seven per cent. The price has left important resistance at just under EUR 74 behind and has established itself above the 200-day-line, which is currently at EUR 72.40. If nothing fundamentally bearish happens and there is no major profit-taking, there is much to suggest that the price will remain above the 200-day line this week and not leave the upward trend channel. This could even lead to a test of the EUR 80 mark in the benchmark December 24 contract.

There will be no auction on the Leipzig EEX today (Monday) due to the Spring Bank Holiday and the Polish auction will also not take place on Wednesday as scheduled. As a result, only a total of 7,995,000 EUAs will be auctioned this week, which corresponds to just around 60% of the previous week’s auction volume.

    (Average Quotes Exchange / OTC)       
EUA (December-2024-Future)70.69 EUR75.61 EUR+4.92 EUR
VER (Natural Carbon Offsets)1.09 USD1.02 USD-0.07 USD
VER (CORSIA eligible Carbon Offsets)0.42 USD0.40 USD-0.02 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)84.30 USD82.33 USD-1.97 USD
EURO (Currency, Forex)1.0868 USD1.0847 USD-0.0021 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