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Emissions Trading / Carbon Market News (18/11/2024)

Dear Sir or Madam,

On the first day of this year’s UN Climate Change Conference COP29 in Azerbaijan, almost 200 countries agreed on new rules for global emissions trading, even though many of the framework conditions and rules still need to be worked out.

This emissions trading should enable states and companies to purchase CO2 certificates from climate protection projects and thereby offset their emissions. As with voluntary emissions trading, a certificate is generated for each tonne of CO2 or its equivalent of greenhouse gases avoided, which can then be traded and retired.

These rules have been in the works since the 2015 Paris Agreement on climate change, and since they were still very inadequate at last year’s COP28 in Dubai, they were rejected by the EU and developing countries.

Last Monday’s agreement has now laid the foundations for a global emissions trading market that functions according to international rules and only allows high-quality carbon credits to be used to offset unavoidable emissions, or emissions that cannot be avoided at a disproportionate cost.

Prices for European emission allowances have remained almost unchanged on a weekly basis, with the December benchmark contract for EUA futures continuing to move in an upward technical pennant within a range of 65.39 to 68.80 euros.

If this formation is maintained, the price would move in the range of approx. 65 to 69 euros this week, the 200-day line, which currently stands at 65.12, could also provide support. In addition, a total of 14,582,500 EUAs will be auctioned on the EEX on all five trading days.

For the procurement of national emission allowances for 2024, there are only six auctions left on Tuesdays and Thursdays at the EEX, in which we can participate for you. The last auction is on Thursday, 5 December 2024 and ends at 3:00 p.m.

    (Average Quotes Exchange / OTC)       
Instrument08/11/2415/11/24Change
EUA (December-2024-Future)68.02 EUR68.01 EUR-0.01 EUR
VER (Natural Carbon Offsets)0.23 USD0.24 USD+0.01 USD
VER (CORSIA eligible Carbon Offsets)0.10 USD0.21 USD+0.11 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)74.26 USD71.20 USD-3.06 USD
EURO (Currency.. Forex)1.0715 USD1.0540 USD-0.0175 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

Your Advantag – Team

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Emissions Trading / Carbon Market News (11/11/2024)

Dear Sir or Madam,

Last week, Donald Trump was elected as the 47th President of the United States of America by a surprisingly large majority. As the 45th US President, he had already decided to withdraw from the Paris Agreement on climate change during his first term in office. It can be assumed that Trump will act accordingly again after his inauguration.

The 29th Conference of the Parties (COP29), the 29th World Climate Conference, begins today in Baku, the capital of Azerbaijan, and is scheduled to run until 22 November 2024. In view of the change of power in Washington, this topic will certainly be on the agenda.

Other topics at COP29 include payments to the countries of the so-called ‘global South’ that are most affected by climate change, as well as a new financing target from 2026.

It will also address Article 6 of the Paris Agreement and the associated market-based climate protection instruments and emissions offsetting mechanisms to combat the climate crisis. In addition, several other measures will be negotiated, such as a climate damage tax for polluting countries, technical solutions for greenhouse gas reduction, CO2 storage technologies and negative emissions technologies.

High hopes for breakthroughs in the negotiations, particularly with the largest global emitters, are likely to be in vain in Baku.

Last week, EU emission allowances rose sharply under the bullish influence of the electricity and gas market, closing the trading week up 6.5% on the previous week.

Technically, the path towards the 70-euro mark would be clear, but a relapse to the 200-day line, which is currently at 65.01, is also quite possible. Should one of these two marks be breached, either upwards or downwards, this could signal the short-term trend.

This week, a total of 11,749,000 EUA and, on Wednesday, 899,500 emission rights for the aviation industry (EUAA), which can also be used for stationary installations, will be auctioned on the European Energy Exchange.

    (Average Quotes Exchange / OTC)       
Instrument01/11/2408/11/24Change
EUA (December-2024-Future)63.87 EUR68.02 EUR+4.15 EUR
VER (Natural Carbon Offsets)0.40 USD0.23 USD-0.17 USD
VER (CORSIA eligible Carbon Offsets)0.44 USD0.10 USD-0.34 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)73.33 USD74.26 USD+0.93 USD
EURO (Currency.. Forex)1.0834 USD1.0715 USD-0.0119 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

Your Advantag – Team

Posted on

Emissions Trading / Carbon Market News (05/11/2024)

Dear Sir or Madam,

For decades, greenhouse gas emissions in the European Union have not fallen as sharply as they did in 2023 – excluding the 2020 coronavirus year, when they fell by 9.8% – with a decline of 8.3%, as published by the EU Commission last week. EU-wide, greenhouse gas emissions were thus 37% below 1990 levels, and the target for 2030 is 50%.

Unfortunately, this is not only due to carbon emissions trading, technical innovation and the use of renewable energies, but also to the decline in production in the EU, above all in Germany, the largest economy in the EU.

Surprisingly, the economy grew in Germany by 0.2% in the third quarter of 2024, but a recession is expected in the fourth quarter.

Germany’s finance minister, Christian Lindner (FDP), has therefore now written a ‘concept for growth and intergenerational justice’ in which he proposes to cut all unnecessary subsidies and reduce bureaucracy, as well as climate plans in Germany that go beyond EU targets.

The FDP is of the opinion that emissions trading should be the sole instrument, which has demonstrably shown its effectiveness and reduced emissions in all sectors in which a price has been set through the ‘cap-and-trade’ mechanism.

Since this pragmatism is completely contrary to the ideas of the coalition partners, more than a few see an end to this government in the not too distant future.

Last week, EU emission allowances fell back into the red as expected, losing 4.6% on a weekly basis.

It is extremely difficult to predict how the market will develop this week, as political factors such as the outcome of the US elections or a further escalation of the dispute in the German government could have an influence on this, in addition to developments in the energy sector.

This week, 14,582,500 EUA will be auctioned on the EEX over all five trading days, an increase of 24% over the previous week.

The last auction for EUA on the Leipzig Energy Exchange EEX this year will take place on Monday, 16 December 2024, and the first auction in the coming year will take place on Tuesday, 7 January 2025.

In Germany’s national emissions trading scheme (nEHS), the final spurt is now on, with the last auction at which national emission certificates for 2024 (nEZ24) can be purchased this year taking place in just over a month, on Thursday, 5 December 2024.

In the following year, 2025, only 10% of the allowances available on the registry account on 31 December 2024 can be purchased in the nEHS at a price of 45 euros, so no levies should be made this year as part of compliance.

If you have any questions, please do not hesitate to contact us.

    (Average Quotes Exchange / OTC)       
Instrument25/10/2401/11/24Change
EUA (December-2024-Future)66.97 EUR63.87 EUR-3.10  EUR
VER (Natural Carbon Offsets)0.51 USD0.40 USD-0.09 USD
VER (CORSIA eligible Carbon Offsets)0.43 USD0.44 USD+0.01 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)76.05 USD73.33 USD-2.72 USD
EURO (Currency.. Forex)1.0795 USD1.0834 USD+0.0039 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

Your Advantag – Team

Posted on

Emissions Trading / Carbon Market News (28/10/2024)

Dear Sir or Madam,

The prices in the European Emissions Trading System EU ETS show the current price for the emission of one tonne of CO2 or its equivalent (CO2e) in the sectors currently priced by the EU, but what happens to the revenues generated by the European primary market auctions on the European Energy Exchange EEX?

Among other things, the European Union is supporting 85 innovative ‘net-zero projects’ with a total of 4.8 billion euros. These projects receive funding from the so-called innovation fund and are intended to develop climate-friendly technologies and make them usable, which should contribute to the decarbonisation of Europe.

These projects are located in 18 countries and are to be implemented by 2030, saving 476 million tonnes of CO2e in the first 10 years. They are in areas such as renewable energies, energy storage and mobility.

Last week, prices in the EU ETS recovered significantly compared to the previous week. After Monday was still bearish, the price rose to the 200-day line, particularly on Wednesday, and on Thursday this resistance and the 38-day line were also easily overcome.

After the 60-euro mark proved stable at the beginning of October and prices moved well away from it, some market participants closed their short positions and this short covering supported the 7.5% price increase on a weekly closing price basis.

However, since nothing has changed fundamentally, it is relatively likely that the market will calm down again in the coming week and tend more towards the 200-day line, which is currently at 64.91. It remains to be seen how strong it will prove to be as possible support.

After the 14,582,500 EUAs auctioned on the EEX last week, only 11,749,000 EUAs will be auctioned over four trading days in the new trading week, as the Polish auction is not scheduled to take place on Wednesday.

    (Average Quotes Exchange / OTC)       
Instrument18/10/2425/10/24Change
EUA (December-2024-Future)62.28 EUR66.97 EUR+4.69  EUR
VER (Natural Carbon Offsets)0.34 USD0.51 USD+0.17 USD
VER (CORSIA eligible Carbon Offsets)0.42 USD0.43 USD+0.01 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)73.46 USD76.05 USD+2.59 USD
EURO (Currency.. Forex)1.0866 USD1.0795 USD-0.0071 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

Your Advantag – Team

Posted on

Emissions Trading / Carbon Market News (21/10/2024)

Dear Sir or Madam,

In January of this year, the Carbon Border Adjustment Mechanism (CBAM) began and importers of goods such as aluminium, iron, steel, cement, fertilisers, hydrogen or electricity, as well as their primary products, into the European Union are obliged to provide quarterly information on the related greenhouse gas emissions to the European Commission.

From January of next year, the companies concerned will be subject to additional registration requirements. Should obligated companies fail to comply with this requirement, they risk no longer being able to import goods into the EU.

It will become financially significant from January 2026, when importers will have to participate in the EU Emissions Trading System (EU ETS) and purchase emission rights for their imports.

However, the North Rhine-Westphalian Ministry of Economic Affairs, headed by Minister of Economic Affairs Mona Neubaur, does not yet consider the current regulations to be sufficient and points out some design flaws. For example, the ministry considers the administrative burden on companies to be too high, which affected companies certainly see it the same way.

Furthermore, there is no compensation for European exporters who participate in the EU ETS and purchase rights for their emissions, but have to compete on the global market with companies that are not subject to any or much lower carbon pricing.

For example, an EU emission allowance for one tonne of CO2 currently costs more than 62 euros, whereas in China it costs just over 13 euros. In China, only the energy industry is required to pay the levy, but this is set to change soon.

Furthermore, German North Rhine-Westphalia is calling on the EU to extend the levy to goods containing iron, steel or aluminium, such as brake discs, grills, washing machines and cars.

Last week, prices for EU emission rights were 3.6% lower than in the previous week. A sustained break-through attempt above the 200-day moving average, which is currently at 64.95, failed on Wednesday.

One bearish factor was oil, which saw a price slump last week, coinciding with news that Israel would probably not attack Iranian oil refineries and storage facilities after all, causing Brent crude to slump by 7.5% on a weekly closing price basis.

This week, 14,582,500 EUA will be auctioned on the European Energy Exchange on all five trading days, which corresponds to an increase of 13.8 per cent compared to the previous week.

    (Average Quotes Exchange / OTC)       
Instrument11/10/2418/10/24Change
EUA (December-2024-Future)64.62 EUR62.28 EUR-2.34 EUR
VER (Natural Carbon Offsets)0.33 USD0.34 USD+0.01 USD
VER (CORSIA eligible Carbon Offsets)0.43 USD0.42 USD-0.01 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)79.38 USD73.46 USD-5.92 USD
EURO (Currency.. Forex)1.0931 USD1.0866 USD-0.0065 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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,

Your Advantag – Team