Emissions Trading / Carbon Market News (28/08/2023)

Dear Madam or Sir,

Climate change, with its many manifestations, has led to sad records in forest fires over the past week. Greek Citizen Protection Minister Vassilis Kikilias, for example, complained at a press conference that it was “the worst summer since records began.” According to the EU Commission, the fires near the northeastern port city of Alexandroupolis are in fact the largest fires in the history of the European Union. More than 73,000 hectares have already been burnt, the Commissioner for Humanitarian Aid and Crisis Management, Janez Lenarcic, announced.

But this fire is almost nothing compared to the fires in Canada. This year, fires in Canada have already destroyed an area larger than the total area of Greece.

Another example is currently being provided by the Panama Canal, where a persistent drought is significantly restricting traffic on the waterway and will continue to do so for the next few months. Numerous freighters must wait for their passage, and an imposing shipping congestion is already forming in front of the trade passage. This is causing supply chains worldwide to come to a standstill.

It sounds somewhat perplexing when, at the same time, the current projection report of the Federal Environment Agency takes place and concludes that the German government’s planned new climate protection measures could leave a gap of up to 331 million tonnes in the reduction of climate-damaging greenhouse gases by 2030. The goal of making Germany climate-neutral by 2045 would not be achieved under the given circumstances, writes the Federal Environment Agency.

After harsh criticism, also from the scientific community, of the new version of the Climate Protection Act, a broad alliance of 42 associations called on the government to take immediate action to “achieve the German climate targets by 2030”. A “socially just implementation of the transformation” was also important, the joint statement said.

However, the Süddeutsche Zeitung also had something positive to report on Thursday. According to it, the net operator Tennet has closed a gap in the electricity axis from northern Germany to the south. On Wednesday, a new high-voltage line between Ganderkesee (Oldenburg district) and St. Hülfe (Diepholz) was put into operation, closing an important connection between the North Sea and North Rhine-Westphalia, as the company announced on the commissioning. As a result, more wind power can now be fed into the grid and directed southwards, thus significantly reducing the shutdown of wind turbines. In total, the line can transmit 3.3 gigawatts of electricity from the coast to the south. This corresponds to the output of two large power plants.

This means that NRW as an industrial region will be supplied with more green electricity, which could also take place in the production of green hydrogen.

The market for European emission allowances was extremely volatile last week, with a price range of around six euros. The December contract briefly exceeded the 90-euro mark at its high.

After the announcement of the agreement in the dispute over wages and working conditions at three liquefied natural gas terminals in Australia, quotations for natural gas fell rapidly and dragged the EUA down. After hitting a two-week low on Friday morning, European carbon prices reversed direction as, on the one hand, energy prices also rose again and, on the other, one of the best auction results this year encouraged traders with short positions to take profits.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)87.18 EUR84.55 EUR-2.63 EUR 
EUA (December-2023-Future)88.01 EUR85.39 EUR-2.62 EUR 
VER (Natural Carbon Offsets)1.58 USD1.65 USD+0.07 USD 
VER (CORSIA eligible Carbon Offsets)0.73 USD0.85 USD+0.12 USD 
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR 
ICE Brent Crude Oil (Benchmark Future)84.75 USD84.61 USD-0.14 USD 
EURO (Currency, Forex)1.0870 USD1.0798 USD-0.0072 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