Emissions Trading / Carbon Market News (29/03/2021)

Dear Sir or Madam,

The German Fuel Emissions Trading Act (BEHG) creates the basis for the issuance and trading of certificates in the national emissions trading system (nETS) for emissions from fuels and ensures that these emissions are priced unless they are covered by EU emissions trading.

This particularly affects the building and transport sectors. The aim is to achieve the national climate protection goals and climate neutrality by 2050. The purpose of the German national emissions trading system is to price fossil greenhouse gas emissions. The law was passed in 2019 as part of the German government’s climate package and came into force in 2021.

In the introductory phase (2021 to 2025), the certificates will be sold at a fixed price. At the start of CO2 pricing in early 2021, a price of 25 euros / tCO2 is planned; this will rise to 55 euros / tCO2 by 2025.

From 2026, emission rights will then be auctioned, whereby a price corridor with a minimum price of 55 euros and a maximum price of 65 euros per emissions certificate has been set. It is not yet known whether a price corridor will also be specified in the following years. The obligated companies must report their emissions for the year 2021 by July 31, 2022 for the first time and submit certificates for the reporting year 2021 in the emissions trading register of the German Emissions Trading Authority (DEHSt) by September 30, 2022.

The Leipzig energy exchange EEX, which is already auctioning the certificates within the framework of the European emissions trading system (EU ETS), was awarded the contract to issue emissions certificates last week. From 2026, the emission certificates are to be auctioned there as soon as free trade is to begin.

Advantag will expand its service areas and, as an intermediary, supply customers from the area of ​​national emissions trading with the required amount of certificates and at the same time advise them on the nETS.

The prices for EU emission allowances (EUA) fell slightly last week and closed on the spot market after a recovery on Friday with a slight minus at EUR 41.63 per ton of CO2e.

What is remarkable, however, is the price development for CER certificates from CDM projects, which can only be used until April 30, 2021 for the partial fulfillment of the tax obligation. These have risen sharply in recent weeks, as CERs of some CDM projects can be used as part of the global CORSIA aviation emissions trading scheme and are therefore subject to increased demand. In addition, plant operators who are obliged to participate in the EU emissions trading system check their last usable quotas for the third trading period and are currently having them procured.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)41.85 EUR41.63 EUR-0.22 EUR
EUA (December-2021-Future)41.97 EUR41,73 EUR-0.24 EUR
CER (Spot-Market)0.44 EUR0.50 EUR+0.06 EUR
ICE Brent Crude Oil (Benchmark Future)64.52 USD64.47 USD-0.05 USD
EURO (Currency, Forex)1.1905 USD1.1794 USD-0.0111 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. CER CP1 and ERU are eligible in ETS until end of March 2015 and must be swapped into 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