News

Dear Madam or Sir,

Last week, the EU presented the report on the development of greenhouse gas emissions in the EU, which are emitted by companies and households.

According to this, a total of 941 million tons of CO2 or its equivalent in other greenhouse gases (CO2e) were emitted in the first quarter of 2023. Compared to the same period in 2022, this is a drop of a good three percent. In the first quarter of 2010 it was still 1,172 tons, since then total emissions in the EU have been falling steadily, with EU emissions trading system making an outstanding contribution.

Households were the biggest sources of emissions at 24%, followed by the manufacturing sector at 20%, energy supply at 19% and agriculture at 13%. In the transport sector, emissions rose to 10%, which is why further measures are required here in particular.

In the past exchange trading week, the EU emission allowances again increased by 1.5% on a weekly closing price basis and closed between the 38-day line (EUR 88.42) and the 200-day line (EUR 86.61) at EUR 88.01 for the December-2023-Future. A breakout towards the EUR 90 mark followed on Thursday, but this was short-lived.

This week the auction volume at the Leipzig EEX has still been halved again with a total of 4,963,000 EUAs over four trading days. From Friday next week, the regular offer will start again at the beginning of September.

(Average Quotes Exchange / OTC)
Instrument	11/08/23	18/08/23	Change
EUA (Spot-Market)	85.88 EUR	87.18 EUR	+1.30 EUR
EUA (December-2023-Future)	86.73 EUR	88.01 EUR	+1.28 EUR
VER (Natural Carbon Offsets)	1.80 USD	1.58 USD	-0.22 USD
VER (CORSIA eligible Carbon Offsets)	0.93 USD	0.73 USD	-0.20 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	86.57 USD	84.75 USD	-1.82 USD
EURO (Currency, Forex)	1.0946 USD	1.0870 USD	-0.0076 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

Dear Madam or Sir,

Last week, the German federal government approved the draft economic plan for the “Climate and Transformation Fund” for the years 2024 to 2027.

The fund is said to have a total volume of 57.6 billion euros and will accelerate decarbonization in Germany by investing almost 19 billion in the renovation of buildings, 12.5 billion in Deutsche Bahn, 12.6 billion in renewable energies. Electromobility along with charging infrastructure, will be funded with a good 5 billion euros. In addition, the development of the hydrogen industry and the semiconductor industry should each receive around 4 billion in funding. Almost 21.6 billion are to be made available for the overall measures in the coming year.

However, since the federal government also needs income for this, the price for national emission certificates is to rise next year by 10 euros to 40 euros and not, as originally planned, to 45 euros per tonne of CO2. In 2025, the prices for the national emission certificates will then increase to 55 euros and in 2026 to 65 euros according to the current timetable.

But not only Germany has special national rules for emitters, Hungary has now also passed a national resolution in the form of a decree on the subject of carbon emissions trading. From this month, participants in the EU emissions trading scheme EU-ETS are to pay a levy of EUR 40 per tonne of CO2e and a transaction tax of 10% for all emission allowances allocated free of charge if they sell these free emission allowances before the end of each year compliance period ending April.

The prices in the EU ETS increased at the end of the past trading week and, based on the weekly closing prices, recorded an increase of a good 3.7%. Until the end of the month the auction volumes have been halved and with the EUAs trading above the 200-day moving average again it will be interesting to see whether the demand for EUAs at the auctions continues to increase.

(Average Quotes Exchange / OTC)
Instrument	04/08/23	11/08/23	Change
EUA (Spot-Market)	82.74 EUR	85:88 EUR	+3.14 EUR
EUA (December-2023-Future)	83.65 EUR	86.73 EUR	+3.08 EUR
VER (Natural Carbon Offsets)	1.90 USD	1.80 USD	-0.10 USD
VER (CORSIA eligible Carbon Offsets)	0.97 USD	0.93 USD	-0.08 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	86.02 USD	86.57 USD	+0.55 USD
EURO (Currency, Forex)	1.1010 USD	1.0946 USD	-0.0064 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

Dear Madam or Sir,

A research team from the Swiss Federal Research Institute for Forest, Snow and Landscape (WSL) has looked at the temperature development over the last 1,200 years and, using 50 million cells from the annual rings of 188 Scandinavian Scots pines, has provided evidence that the current global warming is unprecedented, as they have now published in the journal “Nature”.

Sceptics of human-caused climate change keep referring to the medieval warm period. The team led by study leader Georg von Arx has now refuted claims that the current global warming could be caused by natural fluctuations. The research results show higher temperatures for the years from 850 to 1100 than in the following centuries, but these were significantly below the current temperatures.

Future studies should now also use this method to show the climatic development in other parts of the world, especially in the southern hemisphere.

The fight against climate change is now being waged in Europe and large parts of the world using market-based instruments. In the first half of 2023, Germany alone received almost four billion euros by issuing carbon emission allowances in the European emissions trading system and national emissions trading. This money is used to promote climate protection measures and green technologies.

In the first six months of the year, around 600 million euros were earned in the German national emissions trading system, compared to 650 million euros in the same period of the previous year. The total revenue from national emissions trading system last year was 6.4 billion euros. In 2023, the German Emissions Trading Authority expects total revenues of 6.8 billion euros, which shows that almost 90% of purchases in the second half of the year will be made by those who place fossil fuels on the market.

And this year, the companies that are obliged to participate in national emissions trading should calculate particularly precisely, since the price of the certificates could not only increase by 17% to 35 euros per national emission certificate, but possibly by 50% to 45 euros if the draft of the budget financing law is drafted accordingly should be decided. Only 10% of the certificates held as of 31.12. of the year on the registry account can still be purchased at the EEX in the following year at the old price. On the secondary market, too, the prices for 2023 nEZ will be above the current issue price of 30 euros in the coming year.

In the past week, the prices for emission allowances in the European emissions trading system have fallen further and lost almost 6% on a weekly closing basis.

Due to the missing Polish auction, which takes place every two weeks on Wednesday, only 4,957,000 EUAs will be auctioned on the EEX this week, which is currently one of the few bullish indicators, along with temperatures that are expected to rise again in parts of Europe.

(Average Quotes Exchange / OTC)
Instrument	28/07/23	04/08/23	Change
EUA (Spot-Market)	87.75 EUR	82.74 EUR	-5.01 EUR
EUA (December-2023-Future)	88.68 EUR	83.65 EUR	-5.03 EUR
VER (Natural Carbon Offsets)	1.93 USD	1.90 USD	-0.03 USD
VER (CORSIA eligible Carbon Offsets)	1.05 USD	0.97 USD	-0.08 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	84.80 USD	86.02 USD	+1.22 USD
EURO (Currency, Forex)	1.1015 USD	1.1010 USD	+0.0005 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

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)
Instrument	21/07/23	28/07/23	Change
EUA (Spot-Market)	90.48 EUR	87.75 EUR	-2.73 EUR
EUA (December-2023-Future)	91.43 EUR	88.68 EUR	-2.75 EUR
VER (Natural Carbon Offsets)	2.41 USD	1.93 USD	-0.48 USD
VER (CORSIA eligible Carbon Offsets)	1.38 USD	1.05 USD	-0.33 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	80.81 USD	84.80 USD	+3.99 USD
EURO (Currency, Forex)	1.1124 USD	1.1015 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

Dear Madam or Sir,

The climate activists from “Fridays For Future” sent 101 more or less serious questions to the German FDP parliamentary group in Berlin last week. The main addressee, Christian Lindner, did not leave these questions unanswered. Of course, the 101st question was “How dare you?” and it also proves on the part of the activists that they have a sense of humor and don’t take themselves as seriously as the activists of the “last generation”.

The Liberals have formulated corresponding answers. Here they tried to explain to the climate activists that the mandatory CO2 emissions trading in Europe brings exactly the savings in greenhouse gases that are in line with the Paris climate protection agreement. We want to be open to technology here.

Ultimately, this is also the right way, because the climate does not care how mankind reduces the anthropogenic greenhouse gases, as long as it happens. Burning coal to respond to the energy supply risks of the Ukraine war, certainly not.

In the past week of trading, EU emissions allowances fought through resistance, gaining more than 6 percent on a weekly closing basis. EUAs rose above the EUR 90 mark on Thursday and have been trading well above it since then.

Only 9,913,500 EUAs will be auctioned at the European Energy Exchange this week due to the regular lack of the Polish auction this Wednesday. In the next week, August will start with the annual auction volume being halved and only 7,615,000 EUAs will be offered on all five trading days.

(Average Quotes Exchange / OTC)
Instrument	14/07/23	21/07/23	Change
EUA (Spot-Market)	85.05 EUR	90.48 EUR	+5.43 EUR
EUA (December-2023-Future)	86.04 EUR	91.43 EUR	+5.39 EUR
VER (Natural Carbon Offsets)	2.53 USD	2.41 USD	-0.12 USD
VER (CORSIA eligible Carbon Offsets)	1.22 USD	1.38 USD	+0.16 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	79.63 USD	80.81 USD	+1.30 USD
EURO (Currency, Forex)	1.1213 USD	1.1124 USD	-0.0089 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