Emissions Trading / Carbon Market News (30/05/2023)

Dear Madam or Sir,

A new study was published in the journal “Nature Sustainability” according to which global warming of 2.7°C compared to the pre-industrial age will be reached by the end of this century unless consistent climate protection is pursued. More than a fifth of humanity would then be exposed to extreme or life-threatening heat.

Scientists and climate experts are therefore increasingly relying on CO2 emissions trading and recommend expanding it even further. For example, CO2 emissions in the energy industry in Germany fell from 764 grams of CO2 per kilowatt hour in 1990 to 498 g CO2/kWh in 2022. According to the German Federal Environment Agency, it was 475 g CO2/kWh in 2021 and in 2020 it was only 395 Grams, whereby the increase in the last two years can be explained by the economic upswing after Corona and the Ukraine war.

The efficiency of emissions trading has also been demonstrated across the European Union. In the EU energy industry, for example, CO2 emissions were halved between 2000 and 2020 alone, as the German Federal Government’s Expert Council on Climate Issues shows.

A prohibition policy such as the German Building Energy Act, on the other hand, is clearly thought too small. If you take a close look at compliance carbon emissions trading, you quickly realize that this already has the desired steering effect. The only thing that needs to be done from the income is to make funds available for the building sector to support it on the way to “Net Zero”.

Last trading week, EU emissions allowances broke key support levels and the December benchmark EUAs contract fell more than 8 percent on a weekly close basis, a four-month low.

Technically, the price is right on a support line, and it remains to be seen whether this can be maintained. The course could receive further support due to the reduced auction volume of 6.8 million EUAs at the Leipzig EEX due to Pentecost.

In national emissions trading in Germany, which provides for a fixed price phase in the EEX auctions of EUR 30.00 this year, EUR 35.00 in the coming year and EUR 45.00 in 2025, and in 2026 trading with a price corridor of EUR 55.00 to EUR 65.00, the governing party FDP is now pushing for trading with free pricing to begin as early as next year. It remains to be seen whether the other governing parties can make friends with this.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)88.55 EUR81.05 EUR-7.50 EUR
EUA (December-2023-Future)89.88 EUR82.30 EUR-7.58 EUR
VER (Natural Carbon Offsets)1.45 USD1.28 USD-0.17 USD
VER (CORSIA eligible Carbon Offsets)1.15 USD0.93 USD-0.22 USD
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)75.76 USD77.05 USD+1.29 USD
EURO (Currency, Forex)1.0794 USD1.0727 USD-0.0067 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