Emissions Trading / Carbon Market News (27/12/2022)

Dear Madam or Sir,

We hope you had a peaceful and relaxing Christmas holiday.

Shipping will take part in EU emissions trading from 2024. The trialogue negotiations between the EU Parliament, the Commission and the Council of Ministers have finally reached an agreement and appropriate regulations have been adopted as part of the “Fit-for-55” package.

From January 1st, 2024, voyages by ships with more than 5,000 GT within the waters of the European Union will be 100% covered by EU emissions trading. Journeys between EU and non-EU ports are covered by 50% of their greenhouse gas emissions. Three emission allowances are to be calculated per one ton of fuel.

However, the inclusion in trading with European emission allowances is taking place step by step. In 2024, for example, only 40% will be subject to mandatory trading within the framework of the EU ETS, which will have to be settled with EU emission allowances (EUA/European Allowances). However, by 2025 it will already be 70% and from 2026 100% of emissions will be included.

This increases the volume of EU Emissions Trading System by around 7% or nearly 85 million tons annually.

The financial proceeds resulting from the inclusion of the certificates at the Leipzig EEX are to be used in Germany especially for the development of low-emission propulsion systems in shipping.

Earlier last week, the benchmark EU Emission Allowances contract expired and the December 2023 contract now occupies this position. Since no major political surprises are to be expected in the current shortened trading week, the quotes will be based more on the charts. Here we currently see a range between 87 and 95 euros as possible.

You know that we participate in the markets for mandatory CO2 emissions trading. However, we are also active in voluntary carbon emissions trading and offset greenhouse gas emissions for our customers.

In addition to direct contacts with operators of greenhouse-gas reduction projects, we are also a member of the Carbon TradeXchange (London/Melbourne) and therefore have access to currently more than three million carbon credits with a market value of more than nine million US dollars.

The prices of the certificates for voluntary compensation are currently as follows:

• VERRA VCS:              $2.46 to $12.60

• CDM-CER:                $0.74 to $20.00

• Gold Standard VER: $5.30 to $44.00

Please let us know, if you have any demand of voluntary carbon reduction. We will find the right projects for your business or private carbon offsetting.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)86.94 EUR88.98 EUR+2.04 EUR
EUA (December-2023-Future)87.41 EUR89.37 EUR+1.95 EUR
VCU (Voluntary Carbon Units ø)3.53 USD3.81 USD+0.28 USD
VER (Gold Standard Spotmarkt ø)2.55 USD2.75 USD+0.20 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)79.18 USD83.92 USD+4.74 USD
EURO (Currency, Forex)1.0585 USD1.0614 USD+0.0029 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