Emissions Trading / Carbon Market News (31/07/2023)

Dear Madam or Sir,

The Intergovernmental Panel on Climate Change (IPCC) was already established 35 years ago and has since provided the governments of the world with the facts for science-based decisions in various status reports. But it was only in 2015 that these findings led to the Paris Agreement, which was adopted by all 195 countries and the European Union at that time and envisages limiting global warming to “well below” two degrees Celsius compared to pre-industrial times and making efforts to limit it to 1.5 degrees Celsius.

Last week, the IPCC has elected the British Jim Skea as its new president. The professor of sustainable energy at Imperial College in London has been involved in climate research for around 40 years and started his presidency with a bang. He said what many were already thinking when he declared that it was “absolutely certain” that the 1.5-degree target could no longer be achieved. But despite everything, something like a law of inertia seems to determine the actions or inactions of politics, economy, and private individuals.

The cost of this behaviour takes place not only in terms of human suffering, but also in financial terms. According to calculations by the reinsurer Munich Re, natural catastrophes caused global losses of $ 110 billion (EUR 99.26 billion) in the first half of 2023 only. Most of these losses must be paid by the affected people and companies themselves, since according to Munich Re only $ 43 billion of these losses were insured. And if you look at the situation in July, where hundreds of forest fires on the one hand as well as storm and flood catastrophes on the other dominate the news, it is easy to imagine what the total will be at the end of this year. The consequences of man-made climate change have long since become a significant economic factor, of which we are currently only feeling the fringes.

The European emissions trading system can be seen as a real guarantee of success for climate protection. This has seen quite a turbulent trading week. After the December contract had reached a five-week high of around EUR 93.50 on Wednesday, it subsequently retreated continuously until it found stable support at around EUR 88.50 on Friday afternoon.

  (Average Quotes Exchange / OTC)   
EUA (Spot-Market)90.48 EUR87.75 EUR-2.73 EUR 
EUA (December-2023-Future)91.43 EUR88.68 EUR-2.75 EUR 
VER (Natural Carbon Offsets)2.41 USD1.93 USD-0.48 USD 
VER (CORSIA eligible Carbon Offsets)1.38 USD1.05 USD-0.33 USD 
nEZ (German National Carbon Units)30.00 EUR30.00 EUR+0.00 EUR 
ICE Brent Crude Oil (Benchmark Future)80.81 USD84.80 USD+3.99 USD 
EURO (Currency, Forex)1.1124 USD1.1015 USD-0.0109 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