Dear Madam or Sir,

Russia has announced that it will undergo further maintenance on the Nord Stream 1 gas pipeline and will probably not deliver gas for three days from August 31, 2022 on, according to the Russian state-owned company Gazprom. Its European subsidiaries have now changed their name from Gazprom to SEFE, as announced earlier this month. The former Gazprom Marketing & Trading Limited is now called SEFE Marketing & Trading Limited and its subsidiaries no longer start with Gazprom, but with SEFE, which paradoxically is supposed to be the abbreviation for Securing Energy for Europe.

This renewed suspension of gas deliveries caused both gas and coal prices to skyrocket, followed by electricity. This rose to 570 euros per megawatt hour (German year-ahead-power), which industry and consumers are clearly feeling.

The high demand for climate-damaging coal energy ultimately also influences the demand for CO2 emission rights (EUA), which with an all-time high of EUR 99.22 in the December futures last Friday just missed the EUR 100 mark.

And on a weekly basis, the EUA gained more than 10% and closed the trading week just above the EUR 98 mark in the December futures contract.

It is difficult to predict how prices will develop in the coming week as EUAs are technically clearly overbought and a healthy correction into the sub-€90 area would be in order.

The course gets bullish support from the fact that in the new trading week only 4,421,500 EUA will be auctioned in Leipzig and the summer break with halved auction volumes will last until the end of the month. In addition, further rising energy prices could ensure that the EUA could test the 100 mark.

(Average Quotes Exchange / OTC)
Instrument	12/08/22	19/08/22	Veränderung
EUA (Spot-Market)	88.58 EUR	97.82 EUR	+9.24 EUR
EUA (December-2022-Future)	88.87 EUR	98.01 EUR	+9.14 EUR
VCU (Voluntary Carbon Units ø)	7.87 USD	8.36 USD	+0.49 USD
VER (Gold Standard Spotmarkt ø)	3.97 USD	4.09 USD	+0.12 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	97.87 USD	95.71 USD	-2.16 USD
EURO (Currency, Forex)	1.0257 USD	1.0202 USD	-0.0055 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,

Quite a few who are currently on summer vacation on the German North Sea and Baltic Sea are happy about a lot of sun and rather atypical weather for local conditions. Others, such as farmers and foresters or inland waterway skippers on the Rhine River, are more concerned about the ongoing drought.

It is already clear that the summer of 2022 will continue the drought trend not only in southern Europe but also in Germany and even has the potential to overshadow the drought summer of 2018.

But not only in Europe it is hot, also in Siberia there were recently temperatures above 35°C in and around Yakutsk. This may not seem worrying at first, but there is the so-called permafrost soil, which naturally thaws at such temperatures. Gigantic amounts of dead plants are preserved in these soils. As these thaws, bacteria start the process of decomposing the organic remains, releasing vast amounts of CO2 and methane gas into the atmosphere, further accelerating climate change and in turn increasing the frequency of heat waves.

The fight against climate change requires the cooperation of large emitters, such as China and the USA. Even if the USA got its own climate-social package with a narrow majority of 51:50 votes through the Senate, the law still must go through the House of Representatives, where the Democrats have a larger majority. However, Nancy Pelosi’s trip to Taiwan not only snubbed China, but also led to the collapse of the US-China climate talks, which should not be underestimated in the global fight against greenhouse gas emissions.

In the past week, the prices for European CO2 emission certificates have risen by almost 8%, partly since the auction volume was halved in August and the efforts of EU ministers to reduce gas consumption by 15% by March 2023. Since this only works with the increased use of coal, despite the expansion of renewable energies, greater demand for EUAs from the energy supply companies is assumed, which is driving up prices. However, the significantly lower oil price was no reason to halt the rise.

(Average Quotes Exchange / OTC)
Instrument	29/07/22	05/08/22	Change
EUA (Spot-Market)	78.36 EUR	84.49 EUR	+6.13 EUR
EUA (December-2022-Future)	78.55 EUR	84.76 EUR	+6.21 EUR
VCU (Voluntary Carbon Units ø)	7.40 USD	7.58 USD	+0.18 USD
VER (Gold Standard Spotmarkt ø)	2.98 USD	3.43 USD	+0.45 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	103.70 USD	94.42 USD	-9.28 USD
EURO (Currency, Forex)	1.0227 USD	1.0180 USD	+0.0047 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,

While in Europe, due to the seemingly endless war in Ukraine, environmental and energy policy balancing acts have to be mastered, the possibly most spectacular news in favour of climate policy reaches us from the USA.

US Senators Joe Manchin and Chuck Schumer have introduced a long-awaited bill to combat climate change and promote clean energy programmes. The bill has 725 pages and is called the “Inflation Reduction Act of 2022”. While the title points to reducing inflation as the goal of the bill, it would nevertheless be the largest and most aggressive investment Congress has ever made for climate action, with a planned $369 billion, and includes provisions to reduce US emissions by about 40% by 2030.

Lawmakers, climate change advocates and environmentalists, who had attacked Senator Manchin for his previous opposition to climate action, were thrilled by the surprise announcement. In fact, it would be a big win for the clean energy transition – providing financial incentives and tax credits for everything from manufacturing clean energy products and buying clean vehicles as well as promoting clean sources of electricity. President Joe Biden said the tax credits and investments in clean energy projects will create thousands of new jobs and help lower energy costs. That is why he urged the Senate to pass the bill as soon as possible. The Senate will vote on the climate change bill next week. Afterwards, it will be passed on to the Democrat-dominated State House.

Prices for European emission allowances have recovered a little from the previous week’s decline and found their way back to the 80-euro mark, especially on Thursday and Friday. Analysts continue to expect at least moderately higher prices, as the increased burning of coal as well as EU market reforms will offset the effects of the recent agreement on reducing the use of gas and because emissions from the power sector will also rise above the 2021 level. This fits with the news from several European utilities, which confirmed in their half-year results an increase in their fossil power generation covered by the EU ETS. Among other reasons, they cited declining hydropower production due to drought-like conditions on the Iberian Peninsula.

(Average Quotes Exchange / OTC)
Instrument	22/07/22	29/07/22	Change
EUA (Spot-Market)	76.36 EUR	78.36 EUR	+2.00 EUR
EUA (December-2022-Future)	76.60 EUR	78.55 EUR	+1.95 EUR
VCU (Voluntary Carbon Units ø)	8.07 USD	7.40 USD	-0.67 USD
VER (Gold Standard Spotmarkt ø)	3.35 USD	2.98 USD	-0.37 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	103.58 USD	103.70 USD	+0.12 USD
EURO (Currency, Forex)	1.0161 USD	1.0227 USD	+0.0066 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 German Federal Ministry for the Environment published a study last week which came to the conclusion that drought, heat and heavy rain have caused damage of more than 80 billion euros in Germany alone in recent years.

Since 2000, an average of at least 6.6 billion in damage has occurred in Germany every year. In particular, the extraordinarily hot and dry summers of 2018 and 2019 and the flash floods and floods in July 2021 contributed 40 billion euros to this. Around 35 billion euros in damage was caused by the heat and drought in 2018 and 2019 alone. In addition, damage of around 5 billion euros was caused by isolated storm and hail events.

And if you look at the drought and heat waves of the summer of 2022 so far, with many days above 30°C, this year will also cause immense costs in Europe.

Uncertainty about gas supply and the European emergency plan sent prices for European carbon emission allowances plummeting in the past trading week. On a weekly close basis, they are down 10.3%, breaking through key chart technical support lines.

However, it currently looks as if the price is stabilizing in the area above EUR 76 and it would not be surprising if prices were to move back towards the EUR 80 mark in the short term.

(Average Quotes Exchange / OTC)
Instrument	15/07/22	22/07/22	Change
EUA (Spot-Market)	85.16 EUR	76.36 EUR	-8.80 EUR
EUA (December-2022-Future)	85.38 EUR	76.60 EUR	-8.78 EUR
VCU (Voluntary Carbon Units ø)	8.63 USD	8.07 USD	-0.56 USD
VER (Gold Standard Spotmarkt ø)	3.74 USD	3.35 USD	-0.39 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	100.99 USD	103.58 USD	+2.59 USD
EURO (Currency, Forex)	1.0064 USD	1.0161 USD	+0.0097 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,

Climate change is leading to major problems in Europe this summer. In the past few weeks, southern Europe has been hit by an exceptional heat wave with temperatures around 40°C and drought, with Italy, Spain and Portugal leading the way. This led to forest fires in many places, which are difficult to contain due to the hot and dry wind and spread quickly.

Northern Italy has been in a state of emergency for weeks, as one heat wave follows the next and there is no precipitation. There is a visible lack of water in Lake Maggiore and at Lake Garda and the first regions have already restricted the consumption of drinking water, such as Milan, Venice and Verona. In the Po Valley, 30 percent of all Italian agricultural production is threatened this year and the region is experiencing its worst drought in 70 years. In addition to the Ukraine war, this is likely to have a further impact on the already high global food prices.

This week, the heat wave is also coming to Germany, with temperatures of almost 40°C, where there is already a water shortage in many regions and the risk of forest fires is increasing day by day. Great Britain meanwhile fears temperature records of around 40°C this week.

The 13th Petersberg Climate Dialogue has been taking place since yesterday and will be attended by around 40 ministers from a wide variety of countries. This year it is taking place at the German Federal Foreign Office and is being hosted by Germany and Egypt, where the World Climate Conference (COP27) will take place in autumn. It remains to be seen whether there will be significant results at a time when coal-fired power generation is supposed to secure Germany’s energy supply.

The market for European carbon emission allowances last week recouped the losses of the previous week and the EUA closed above the 85-euro mark with continued low volatility. The price gains were accompanied by a euro, which briefly traded below the US$ 1 mark at 0.9951 last Thursday, and an oil price (Brent variety), which marked a short-term low of under US$ 96, a price that was last seen in February. The euro is still under pressure on energy supply risks and oil fell sharply after the US suggested a maximum price for Russian Ural oil in a range of US$ 40 – US$ 60 per barrel.

In this trading week there is once again the full volume of a total of 11.5 million EUAs, which are auctioned at the European Energy Exchange on all five trading days. In the next week there will then be 8.8 million EUAs before the annual halving of the auction volume occurs in August and alternately 5.7 million or 4.4 million EUAs are offered for auction.

(Average Quotes Exchange / OTC)
Instrument	08/07/22	15/07/22	Change
EUA (Spot-Market)	82.55 EUR	82.55 EUR	+2.61 EUR
EUA (December-2022-Future)	82.79 EUR	82.79 EUR	+2.59 EUR
VCU (Voluntary Carbon Units ø)	8.83 USD	8.83 USD	-0.20 USD
VER (Gold Standard Spotmarkt ø)	3.96 USD	3.96 USD	-0.22 USD
nEZ (German National Carbon Units)	30.00 EUR	30.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	107.05 USD	107.05 USD	-6.06 USD
EURO (Currency, Forex)	1.0182 USD	1.0182 USD	-0.0118 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