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Emissions Trading / Carbon Market News (20/01/2020)

Dear Sir or Madam,

According to a recent study, management consultancy McKinsey found that climate change could cost hundreds of millions of lives and trillions of dollars. The consultants have calculated the consequences of the climate crisis for 105 countries and have come to the conclusion that global warming is a serious economic threat insofar as the international community does not take countermeasures and continues to follow its current behaviour.

India, Pakistan, Bangladesh and Nigeria in particular are the regions most affected by climate change. By 2050, up to 1.2 billion people could already be living there in places where there is a risk of fatal heat waves. In agriculture alone, annual losses of up to six trillion US dollars could be expected globally by the middle of the century.

And these are just a few aspects that threaten in a few decades if climate change is not combated with all the intensity required.

Rising demand for CO2 emission rights due to lower free allocation quotas has caused prices for European Allowances (EUA) to increase visibly in the past week; the trading week ended with a plus of more than one Euro, well above the 25 Euro mark.

This week, the auction of 11.6 million EUA on four days is on the trading calendar of the Leipzig EEX, which is more than 6 million tons less than in the previous week.

  (Average Quotes Exchange / OTC)      
Instrument 10/01/2020 17/01/2020 Change
EUA (Spotmarket) 24.12 EUR 25.34 EUR +1.22 EUR
EUA (December-2019-Future) 24.21 EUR 25.44 EUR +1.23 EUR
CER (Spotmarket) 0.22 EUR 0.22 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 65.10 USD 65.06 USD -0.04 USD
EURO (Currency, Forex) 1.1119 USD 1.1089 USD -0.0030 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

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Emissions Trading / Carbon Market News (13/01/2020)

Dear Sir or Madam,

As you read our market report, your computer, server, and network are consuming power. The same applies to the Internet, the associated data centers and all associated technologies. According to the Federal Environment Agency, German internet and computer use generates a total of around 30 million tons of CO2 annually. That is about 20% more greenhouse gases than a whole country, such as Croatia, causes in annual greenhouse gas emissions. According to the Parisian Shift Project, the share of emissions from the digital economy is already 3.7% of total global greenhouse gas emissions and is growing rapidly by around 9% annually. In five years, the share is expected to be 8% of global greenhouse gas emissions.

In particular, cryptocurrencies such as Bitcoins or Ethereum have a very high energy consumption in their global computing power. But streaming services for films and music are also increasing every year, with a feature film with more than 6 kilos of CO2 on the list.

Better technical solutions are required here as well as the use of CO2-neutral energy and the compensation of unavoidable greenhouse gases in order to reduce the carbon footprint to a minimum. The topic “green Internet” will certainly be an issue in the future.

In the past trading week, the defused political situation in relation to Iraq has again influenced the price of crude oil, which has fallen by more than 5%, as Tehran’s previous reactions have been moderate. In the course of this and due to the continued mild temperatures in Central Europe, the prices for CO2 emission allowances also decreased, but less strongly than was expected.

It will be interesting to see how the market will deal with the relatively high auction volume of around 17 million EUA and 0.8 million EUAA this week.

  (Average Quotes Exchange / OTC)      
Instrument 03/01/2020 10/01/2020 Change
EUA (Spotmarket) 24.86 EUR 24.12 EUR -0.74 EUR
EUA (December-2019-Future) 24.98 EUR 24.21 EUR -0.77 EUR
CER (Spotmarket) 0.22 EUR 0.22 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 68.63 USD 65.10 USD -3.53 USD
EURO (Currency, Forex) 1.1161 USD 1.1119 USD -0.0042 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

Posted on

Emissions Trading / Carbon Market News (03/01/2020)

Dear Sir or Madam,

The US missile attack on the convoy of Iranian general Ghassem Soleimani last Friday is causing prices on commodities markets to rise as escalation is considered highly likely. Gold, in particular, as a crisis indicator, as well as crude oil and gas, have grown strongly since then.

After Brent crude oil prices started more easily into the new year, it rose to just under USD 2.50 on Friday and the likelihood that this trend will continue is shown by the start of today’s trading day, at which the USD 70 mark is reached fell. Any kind of reprisal strikes from Iran that have already been threatened several times have the potential to cause prices to rise further. The engagements of US oil companies in Iraq in particular could now be the focus of Iranian attacks.

In the course of this, the prices for European CO2 emission rights have also become more expensive towards the end of the past trading week after an easier start to the new year. After a decline of EUR 1.61 on the last trading day in 2019 and an equally subdued start in January 2020, prices rose last Friday in the wake of oil prices and have risen above the € 25 mark again today.

Auctions for CO2 emission rights begin again this week at Leipzig’s EEX. A total of 8,544,000 EUAs will be auctioned on Tuesday, Thursday and Friday.

  (Average Quotes Exchange / OTC)      
Instrument 27/12/2019 03/01/2020 Change
EUA (Spotmarket) 26.54 EUR 24.86 EUR -1.68 EUR
EUA (December-2019-Future) 26.70 EUR 24.98 EUR -1.72 EUR
CER (Spotmarket) 0.26 EUR 0.22 EUR -0.04 EUR
ICE Brent Crude Oil (Benchmark Future) 65.12 USD 68.63 USD +0.51 USD
EURO (Currency, Forex) 1.1173 USD 1.1161 USD -0.0012 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

Posted on

Emissions Trading / Carbon Market News (30/12/2019)

Dear Sir or Madam,

While Germany is arguing about bans on New Year’s Eve fireworks and a uniform speed limit, the US weather agency NOAA reported last week that 2019 was the second hottest year globally after the record year 2016 so far. The average temperature of the land and ocean areas of the earth was 0.94 degrees Celsius above the average of the 20th century. 2015, 2017, 2018, 2014, 2010 and 2013 also made it into the top ten of the hottest years.

The prices for European CO2 emission rights are currently stable during the auction break despite rising oil prices. In the second week of January, the auction volume also begins to be cautious; only 8,544,000 EUAs will be put up for auction. In the following week, the volumes increased significantly to 16,966,500 EUA and 810,500 EUAA (emission allowances for air traffic).

Overall, due to the lower free allocation on the Leipzig EEX, significantly more emission rights will come onto the market through the auctions in 2020. These are in particular 493,571,000 EUA from the EU member states, 131,266,000 EUA from Germany and 141,067,500 from Poland. Furthermore, 4,588,500 EUAA for the EU member states, 801,500 EUAA for Germany and 112,500 EUAA for Poland are to be auctioned in the coming year.

We do not want to miss to wish all readers of our newsletter a good start into the new year and a happy and healthy 2020!

  (Average Quotes Exchange / OTC)      
Instrument 20/12/2019 27/12/2019 Change
EUA (Spotmarket) 26.58 EUR 26.54 EUR -0.04 EUR
EUA (December-2019-Future) 26.67 EUR 26.70 EUR +0.03 EUR
CER (Spotmarket) 0.22 EUR 0.26 EUR +0.04 EUR
ICE Brent Crude Oil (Benchmark Future) 65.13 USD 68.12 USD +2.99 USD
EURO (Currency, Forex) 1.1078 USD 1.1173 USD +0.0095 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

Posted on

Emissions Trading / Carbon Market News (23/12/2019)

Dear Madam or Sir,

The new elections in Great Britain have now accelerated the former “infinite history” of Brexit to the maximum. Last week, the British Parliament approved the Brexit law and there is little doubt that the EU Parliament will shortly agree to the negotiated deal. This would finally put an end to all horror scenarios of an unregulated exit, but by no means all uncertainties have been resolved. Because the exit contract regulates the procedures for the separation, but not the basis for future relationships.

And this also affects the emissions trading system. There are of course working papers on the future direction, but far from a decision as to how the British will proceed with regard to CO2 pricing. Some experts predict a CO2 tax here, but there are also considerations regarding their own British trading system. This could then be linked to the European ETS and / or other systems. However, it is also still possible for Great Britain to remain in the ETS as a non-EU country, either until the end of the third trading period on December 31, 2020, or even, if legal requirements are implemented, even beyond.

With all these considerations in mind, the relevant question is floating around, what will become of the marked British EUAs, which were not auctioned in 2019 due to the risk of an unregulated Brexit. There are an estimated 120 to 150 million EUAs that could possibly still flow into the market. However, there is still no final clarity here. If, for example, they came onto the market in weekly auctions over 2020, that would roughly mean three million certificates per week.

The auction-free winter break began on Tuesday of the last trading week and the market reacted with an extremely significant price increase. From its lowest point on Monday, the price rose unstoppably and, after a short breather on Friday, passed the € 27 mark early this morning.

(Durchschnittliche Börsenkurse / OTC)      
Instrument 13/12/19 20/12/19 Veränderung
EUA (Spotmarket) 24.01 EUR 26.58 EUR +2.57 EUR
EUA (Dezember-2020-Future) 24.02 EUR 26,67 EUR +2.65 EUR
CER (Spotmarket) 0.20 EUR 0.22 EUR +0.02 EUR
ICE Brent Crude Oil (Benchmark Future) 64.93 USD 65.13 USD +0.20 USD
EURO (Currency, Forex) 1.1120 USD 1.1078 USD -0.0042 USD

(The average market prices and OTC prices show the respective mean of supply and demand of different trading venues for CO2 emission rights. Bid and ask usually deviate from the mean by several cents. Crude oil and euros show closing prices. The CER prices are CP2 -CERs, which can be used within the framework of the EU-ETS. Our market reports are not recommendations for trading emission rights or their derivatives and are for information purposes only. If you no longer wish to receive the newsletter, please send a short message to Sender.) 

Our trader team will be happy to answer any questions you may have.

Sincerely yours, 

Advantag Services GmbH