News

Dear Sir or Madam,

There is now growing awareness that for economies worldwide it is far more expensive to ignore climate change than to take countermeasures as soon as possible, which are economically damaging in the short term. Crop failure caused by periods of drought, flood damage, forest dying and even lack of snow in the mountains are already causing economic losses, which are even life threatening for companies. In addition, there are the already foreseeable burdens due to mass migration of people who are increasingly losing their livelihoods. Whenever politicians or lobbyists still reluctant to take swift political action to save money, the bill will not work out.

Many of the scenarios that scientists have been forecasting for years have even proven to be overly optimistic. According to recent satellite image and field observations, Swiss researchers have calculated that more than 300 million tonnes of ice melt every year. Iceland has even declared the world’s first glacier as dead. This means that his ice mass has become so light that he can no longer push forward. The glacier has not, as often observed, only regressed, but has become a simple, further melting ice field. The report recalls the fate of Lake Chad, which has shrunk by 90 percent since the 1970s, as a once-powerful and vital source of water supply for the region.

A look at the past trading week reveals an astonishingly sharp correction in the price of CO2 that we have not experienced for years in a month with reduced auction volumes. After being able to guess a rise above the 30-euro mark at the beginning of August, the bears took over the market and melted the important support at 28 euros, just like the aforementioned polar ice. At the London ICE the lowest price was EUR 25.87, a price level which we last saw one month before.

(Average Quotes Exchange / OTC)
Instrument	09/08/2019	16/08/2019	Change
EUA (Spotmarket)	28.09 EUR	26.00 EUR	-2.09 EUR
EUA (December-2019-Future)	28.12 EUR	25.96 EUR	-2.16 EUR
CER (Spotmarket)	0.21 EUR	0.20 EUR	-0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	58.30 USD	58.94 USD	+0.64 USD
EURO (Currency, Forex)	1.1202 USD	1.1097 USD	-0.0105 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

Dear Sir or Madam,

The steering effect of the persistently high price for CO2 emission certificates was targeted by politicians for many years and is now finally realized. Throughout Europe, energy producers must face the fact that coal-fired power generation is no longer competitive. Last week, RWE announced that it would close a 1.56 GW coal-fired power plant in the UK on 31/03/2020. With this measure, only four coal power plants remain in operation on the island. The United Kingdom, however, is aiming to cease coal production by 2025.

From Germany, the Federal Association of the energy industry reported that in June for the first time in five years in a month more electricity was imported than exported. The reason for this is also that electricity from coal is no longer cheaper than electricity from gas-fired power plants or renewable energies.

Meanwhile, in the Czech Republic, a governmental advisory council has been set up in the spirit of a coal commission to work out suggestions on how the changed market situation can be accommodated.

In the European Emissions Trading Scheme it was the introduction of the Market Stability Reserve that triggered the rapid price increase. Similarly, further control measures would now have to be bravely conceived and swiftly implemented so that areas such as agriculture and transport, above all aviation, are decarbonised as quickly as possible.

The annual halving of auction volumes in August led to a rebound in the price in the past trading week. After the consolidation phase, which pushed the price well below 28 euros by the middle of the week, the interest in buying picked up sharply on Thursday by more than five percent. It is quite likely that the market will not only test the € 30 mark again in the course of the month, but that it can also be overcome.

(Average Quotes Exchange / OTC)
Instrument	26/07/2019	02/08/2019	Change
EUA (Spotmarket)	28.25 EUR	29.23 EUR	+0.98 EUR
EUA (December-2019-Future)	28.29 EUR	29.26 EUR	+0.97 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	63.23 USD	61.29 USD	-1.94 USD
EURO (Currency, Forex)	1.1131 USD	1.1109 USD	-0.0022 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

Dear Sir or Madam,

The last week will remain in the collective memory of citizens in Germany and other European countries. Supported by a so-called omega weather situation, extremely hot air came from Africa to the north and caused rows of all-time heat records. In Germany, the highest value so far has been 40.3 degrees from the year 2015. But last Thursday, this mark was surpassed at 15 different weather stations. The highest temperature ever measured in Germany is now officially 42.6 degrees. Even without a calculator, it is easy to see what an immense leap this is.

And the CO2 market has not held back in terms of records in the past trading week. At the beginning of the week, the price was strong and rose constantly, falling just short of the 30 euro mark on Wednesday at EUR 29.95. In the second half of the week, profit taking pushed the price down again, but the persistent bullish sentiment has not yet disappeared from the market.

In fact, the high prices for European pollution rights are already having an effect. The Polish government, which, under the responsibility of the Justice and Justice Party (PiS), has once again pushed the political course towards coal-fired power generation, was forced by the persistently high prices of EUA to pass a law to relieve energy-intensive companies. With only one dissenting vote and six abstentions, it was decided to financially relieve foundries, paper mills, the chemical industry and other companies with the equivalent of around a quarter of a billion euros to be paid by the Polish taxpayer. In contrast, according to a Carbon Pulse report, coal output in Europe fell by 19% in the first half of the year as higher carbon prices and cheaper renewable energies displaced high-emission coal production in almost all countries.

(Average Quotes Exchange / OTC)
Instrument	19/07/2019	26/07/2019	Change
EUA (Spotmarket)	28.85 EUR	28.25 EUR	-0.60 EUR
EUA (December-2019-Future)	28.89 EUR	28.29 EUR	-0.60 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	62.52 USD	63.23 USD	+0.71 USD
EURO (Currency, Forex)	1.1220 USD	1.1131 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. 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

Dear Sir or Madam,

ETH Zurich wants to make the consequences of climate change more tangible and has shown the changes in climatic conditions in various cities in 2050. So who likes to travel from Berlin to San Marino in Italy due to the weather and spend his holidays there, can save himself in about 30 years, because in Berlin then the same conditions prevail and it will be uncomfortably hot in Italy. The climate of Madrid is comparable to that of today’s Marrakech and London will reach temperatures at the current level of Barcelona. So much for the pleasant news – however, a good quarter of the world’s cities will experience climatic conditions that are nowhere to be found anywhere else in the world, with high temperatures, droughts and extreme precipitation.

To mitigate this by reducing greenhouse gases to the level desired by the Paris Agreement on Climate Change, the Federal Council of Economic Experts, also known as the Five Wise Man, has prepared an opinion for the German Federal Government. In order to gain rapid control effects, they have recommended a CO2 tax on fuels and heating oil in order to price the emission of CO2 and act as an example internationally. Initially, the output of one tonne of CO2 should cost 50 euros and increase to 130 euros by 2030.

The better solution to a tax is, according to the industry, CO2 emission trading, but it will take too much time to be transposed into EU law, and action must be taken by the time other sectors are included in the EU emissions trading scheme Objectives of the climate change agreement. The Climate Cabinet of the Federal Government will meet next Thursday and will discuss concrete proposals for reducing CO2 emissions.

The prices for EU emission allowances have become significantly more expensive in the past week and marked a new 11-year high with more than 28 euros. Accompanied by rising energy prices, the market looks set to halve its auction volume in August, as well as the visible reduction in auction volumes during the last four months of the year. This week, EEX will be offering auctions totaling 15,964,000 EUA and 892,000 EUAA. In the coming week, there are 11,534,000 EUA and from Thursday the following week begins the halving of auction volumes taking place every summer.

(Average Quotes Exchange / OTC)
Instrument	28/06/2019	05/07/2019	Change
EUA (Spotmarket)	26.23 EUR	26.33 EUR	+0.10 EUR
EUA (December-2019-Future)	26.28 EUR	26.38 EUR	+0.10 EUR
CER (Spotmarket)	0.21 EUR	0.21 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	66.72 USD	64.49 USD	-2.23 USD
EURO (Currency, Forex)	1.1371 USD	1.1229 USD	-0.0142 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