Dear Sir or Madam,

In recent months, the issues of the corona pandemic, the US presidential election and unregulated Brexit have hit the CO2 market hard. Looking at the current news situation, unfortunately none of these issues has yet been finally stamped as settled: The extremely difficult political balancing act of trying to find appropriate yet effective measures to deal with the corona cases does not seem to have been successful in any European country. The recent speech by the outgoing US President Trump does not change the officially confirmed election results, but it does give a bad hint for the coming weeks. And the summit talks between Ursula von der Leyen and Boris Johnson also remained fruitless.

In the sum of these considerations, a significantly lower CO2 price could be below the 25-euro mark – but that is not the case. Instead, the market continued its rally that started at the beginning of November and recently broke through the psychologically important 30-euro mark again. In the search for reasons for this, the connection with the delay in forthcoming auctions and free allocations is naturally obvious, even if these fresh certificates from the fourth trading period could not be used for the current compliance anyway. And then there is the price of oil, which has also picked up speed again and is showing a remarkably similar course to that of pollution rights.

In addition, however, the political efforts to curb global warming have changed the landscape, as an online workshop of the European Commission on the future of the Market Stability Reserve (MSR) revealed a few days ago. Similar to the steering measures taken by OPEC+ countries to stabilise oil prices, the European Commission intends to keep a close eye on the efficiency of the MSF. It should serve as a robust instrument to achieve the net zero emissions target for 2050. To this end, the expert panel expects changes to the rules of the MSF next year, including its trigger levels and rate of uptake.

(Average Quotes Exchange / OTC)
Instrument	27/11/2020	04/12/2020	Change
EUA (Spot-Market)	28.13 EUR	30.11 EUR	+1.98 EUR
EUA (December-2020-Future)	28.13 EUR	30.11 EUR	+1.98 EUR
CER (Spot-Market)	0.29 EUR	0.30 EUR	+0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	48.17 USD	49.06 USD	+0.89 USD
EURO (Currency, Forex)	1.1963 USD	1.2122 USD	+0.0159 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,

As the European Commission announced at the end of last week, the calculation of the allocation quotas for emission rights is expected to be delayed until the second quarter of 2021, as the process of setting the emission benchmarks required for this will take even longer.

The Commission will also update the reference values ​​that are to be used to calculate the free allocation of allowances (EUA / EUAA) in the period 2021 to 2025 inclusive. This regulation is expected to be adopted in February 2021.

After the final calculation of the certificates to be allocated free of charge to the systems concerned for the period specified above, the free allocation is to begin in the 2nd quarter of 2021.

The commission emphasized once again that the free allocation for 2021, which will flow to the operators this year, should not be given until April 2022 at the earliest. The certificates, which the operators receive free of charge for 2021, cannot be used for the 2020 surrender obligation, even if they would be allocated before the end of April 2021. In the coming year, the transition from ETS phase 3 (2013-2020) to phase 4 (2021-2030) will be completed.

From December 14, 2020, no new certificates will come onto the market for several weeks, which has already shown its price-driving effect in the past week.

One of the other price-forming factors last week was the oil price, which has been rising towards the US $ 50 mark for Brent crude since the beginning of November.

This week, for the last time this year, a total of 20.8 million EUA will be auctioned on all five trading days at the Leipzig EEX, as 6.4 million pieces from the Polish contingent are on Wednesday. In the coming week, 14.4 million EUA will be auctioned on four trading days and in the 51st calendar week the last 3,959,500 pieces for this year will only be auctioned in Leipzig on Monday, December 14th, 2020.

(Average Quotes Exchange / OTC)
Instrument	20/11/2020	27/11/2020	Change
EUA (Spot-Market)	26.74 EUR	28.13 EUR	+1.39 EUR
EUA (December-2020-Future)	26.74 EUR	28.13 EUR	+1.39 EUR
CER (Spot-Market)	0.31 EUR	0.29 EUR	-0.02 EUR
ICE Brent Crude Oil (Benchmark Future)	45.04 USD	48.17 USD	+3.13 USD
EURO (Currency, Forex)	1.1854 USD	1.1963 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. 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 German company Biontech and its US partner Pfizer announced an apparently groundbreaking success in the corona vaccine field at the beginning of last week. The innovative mRNA vaccine is expected to provide more than 90% protection against Covid-19. The experts are positively surprised and speak of “extraordinary” results and a “giant leap forward”. Both the speed of development and the efficiency are exceptionally high, and the otherwise numerous and vocal sceptics are relatively reluctant.

This optimism is of course balsam for the markets battered by the pandemic. On the other hand, however, we should not expect too much euphoria at this stage, as the official test procedure is of course still ongoing and approval is not expected before the beginning of next year, at least not in Europe. Even this may sound very optimistic, but there are significant social challenges ahead, especially until then.

When the first reports of the new virus from China started to circulate almost a year ago, one fact was particularly worrying: the Chinese New Year regularly leads to the world’s largest travel season, with hundreds of millions of travellers. Traditionally, Chinese families gather together and it is not unusual for annual holidays to be used to return home from the most distant parts of the world. This will present the Chinese authorities with a huge logistical and socio-political problem in early 2021.

This year’s Christmas could play a similar role in Europe, with similar traditions. Intensive shopping trips, combined with a visit to a Christmas market and the obligatory family and friends meetings could once again greatly accelerate the spread of the corona virus – just before a vaccine becomes available. In some European countries, however, the effects of the second wave are already frightening.

The CO2 market still benefited a little from the election victory of US President-elect Joe Biden last week. But mainly the news of the breakthrough of the corona vaccine boosted the price, although it is still too early to speak of a real breakthrough.

(Average Quotes Exchange / OTC)
Instrument	06/11/2020	13/11/2020	Change
EUA (Spot-Market)	25.43 EUR	26.36 EUR	+0.93 EUR
EUA (December-2020-Future)	25.45 EUR	26.38 EUR	+0.93 EUR
CER (Spot-Market)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	39.67 USD	42.70 USD	+3.03 USD
EURO (Currency, Forex)	1.1870 USD	1.1834 USD	-0.0036 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,

For us Europeans, the seemingly endless wrangling over a final and official result of the US presidential election is difficult to understand. And while many would now like to get back to business as usual, it is to be feared that this issue will remain open for some time to come – at least that is what the statements of the current president suggest.

In his first public statements, President-elect Joe Biden (46th President) pointed out that, in addition to the overriding goal of reconciling a divided society, there are other issues that should be the focus of his administration from the first day of his presidency, which begins in January. These include the organised fight against the Corona crisis on the basis of scientific recommendations and the return to the United Nations Paris Climate Change agreement. Donald Trump had just identified these issues as particularly damaging to the US economy.

The European emissions trading scheme has acknowledged the probable end of uncertainty and the expected change in policy on the other side of the Atlantic with obvious goodwill. The price of EEA, which has recently been severely hit, has risen significantly. Even at the start of the new trading week, the principle “buy the rumour, sell the fact” does not seem to work, as the CO2 market is currently continuing its upward trend.

(Average Quotes Exchange / OTC)
Instrument	30/10/2020	06/11/2020	Change
EUA (Spot-Market)	23.70 EUR	25.43 EUR	+1.73 EUR
EUA (December-2020-Future)	23.71 EUR	25.45 EUR	+1.74 EUR
CER (Spot-Market)	0.29 EUR	0.29 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	37.85 USD	39.67 USD	+1.82 USD
EURO (Currency, Forex)	1.1648 USD	1.1870 USD	+0.0222 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