Dear Madam or Sir,

The first major storm in 2022 is causing severe damage in northern Germany with wind speeds of hurricane force in northern Germany and in Great Britain. In addition to fallen trees and failed trains, a storm surge flooded the fish market in Hamburg-Altona.

This is due to a long-standing constellation of a high over western Europe and a low in the direction of North America, which has resulted in persistently cloudy, but mostly mild weather in Germany in recent weeks.

Now many will say that storms and grey weather are nothing unusual in Germany. That is correct so far, but the duration of the constellation of the stuck low and high over western Europe is related to the change in the jet stream, the intensity of which has measurably changed over the past two decades. And that has to do with climate change, as global warming has reduced the temperature differentials that drive the jet stream.

Weather conditions can also persist in other constellations over weeks or months, as was the case in the drought summer of 2018. So if a constellation between several summer highs is established over Central Europe, there can be periods of drought, which bring agriculture and forests to their breaking point, or in a similar constellation as now, this can mean a rainy summer with sometimes heavy rain events, like we are experiencing have experienced in the past year.

CO2 emission allowances have been bullish again over the past week, with the EUA December contract trading briefly above the EUR 90 mark last Friday at EUR 90.63. This was thanks to a bullish energy environment, with Brent crude holding above the USD 90 level.

This week, 11,949,000 EUA will be auctioned again at the Leipzig EEX and on Tuesdays and Thursdays nEZ from national emissions trading can already be auctioned for 2022 at a price of EUR 30.00 or at a price of EUR 25.00 for the previous year, insofar as there are still sufficient contingents within the framework of the 10% additional purchase rule.

(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. VCUs and VERs are average prices (CBL markets). 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,

Never before has the global community been so united across all political and economic divides as at the Paris Agreement. At the UN World Climate Conference in December 2015, 197 countries agreed on a global climate protection treaty. The states set themselves the goal of limiting global warming to 1.5 degrees Celsius compared to the pre-industrial era. In addition, the capacity to adapt to climate change should be strengthened and the flow of financial resources should be brought in line with the climate goals.

To actually achieve these goals, not only must each state make a truly serious effort on its own, but governments must also be prepared to cooperate and act in a coordinated manner with one another. Against this background, we can only shake our heads at the political theatre that the world powers are putting on in defiance of the global threat of climate change.

The weekly look at European emissions trading shows a modest one-week gain in EUA’s. At the beginning of the trading week, analysts at an investment bank had raised their forecast for 2023 to EUR 150, citing the severe shortage of allowances as the reason. Almost to confirm this, the auction on Thursday saw the highest number of bids in nearly a year, whereupon numerous unsuccessful bidders rushed to the secondary market and pushed the price up by a good EUR 3.50. Since then we have seen a sideways movement in a range between 84 and 86 euros. Now that the companies know their verified figures for 2021 and the deadline for fulfilling the surrender obligation is approaching, significantly falling prices are unlikely until April.

(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. VCUs and VERs are average prices (CBL markets). 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 Ladies and Gentlemen,

In addition to regional carbon trading systems and various gloabal mechanisms, the market for CO2 emission certificates and carbon credits is also divided into two broad categories – compliance markets and voluntary emissions trading, although there are also some overlaps.

There is mandatory trading with the European Emissions Trading System EU ETS or the national Emissions Trading System nETS in Germany.

Voluntary emissions trading is largely used to compensate for greenhouse gas emissions that are difficult or impossible to avoid. These so-called Verified Emission Reductions (VER) are again divided into several standards and mechanisms, such as the Gold Standard, the Voluntary Carbon Standard, the Natural Forest Standard or the Clean Development Mechanism.

The prices for emission allowances from the EUA’s mandatory CO2 emissions trading have increased tenfold in just a few years. According to a study, the research company Bloomberg NEF has now determined that voluntary certificates could also become significantly more expensive and could reach three-digit prices in 2050.Is that “the next big thing” in environmental markets?

Due to the fact that the VERs have changed since the beginning of the CORSIA trading system for the aviation industry, in which 66 countries have been participating since 2021 and can use various certificates from the voluntary emissions trading market, the prices have already tripled in the past few months and it does not look like it expect this trend to reverse.

The market for European emission allowances has been weaker in the past week. On Monday, the high-volume EUA December future opened at EUR 86.12, but then gave way immediately and was only able to close above the EUR 82 mark again on Friday thanks to support from the energy markets. There was also news about the French energy supplier EDF that it could produce up to 60 TWh less nuclear power this year, which could then cause up to 20 million tons of CO2 more, since it would then have to be generated with coal and gas. Accordingly, the need for just as many EUAs would be necessary, which should not have a negative impact on price development.

(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. VCUs and VERs are average prices (CBL markets). 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 Ladies and Gentlemen,

According to the Federal Environment Agency, the German federal government received more than 12.5 billion euros through carbon emissions trading last year.

For Germany, a total of 101 million emission rights were auctioned on the Leipzig EEX in 2021, which is 6 million EUA less than in the previous year, not least due to the reduction factor of the cap-and-trades system.

The income of 12.5 billion includes a total of 5.3 billion euros from the revenue from EU emissions trading (EU-ETS) and 7.2 billion euros from the national emissions trading system (nEHS) in accordance with the Fuel Emissions Trading Act (BEHG), which includes the transport and building sectors and last year has started.

This income flows into the energy and climate fund and is intended, among other things, to promote climate protection measures, but also to stabilize the recently massive increase in electricity costs. This is intended to push the energy transition further towards decarbonisation. A total of 4.7 billion euros of the income was used to reduce the EEG (Renewable Energy Act) surcharge by 1.37 cents per kilowatt hour in 2021.

However, much more effort will be necessary in the new year to keep the German electricity price in a healthy range for industry and consumers.

In the past week, the prices for European CO2 emission rights (EUA) moved in a range from 79.80 to 88.55 euros and benefited from the increased energy prices and the ongoing pause in auctions on the Leipzig EEX.

This will end tomorrow and a total of 9,921,000 EUAs will be auctioned on four trading days this week.

The auctions in national emissions trading will also resume next week. Up to 10% of the items on December 31, 2021 in the register account of the taxable company can still be auctioned at a price of 25.00 euros per national emission certificate (nEZ) or at an unlimited amount for 30.00 euros.

If you see a need for action here, we will be happy to assist you with advice and action.

(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. VCUs and VERs are average prices (CBL markets). 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