Dear Sir or Madam,

As part of the German government’s climate package, the “Law on National Certificate Trading for Fuel Emissions” or the Fuel Emissions Trading Act (BEHG) will come into force on January 1, 2021. The associated carbon dioxide pricing on fossil fuels put into circulation affects around 3,500 companies in Germany in the fields of natural gas, liquid gas, heating oil and diesel & Otto fuels.

In a transitional phase until 2025, trading in fossil fuels is regulated through the sale of certificates with a staggered fixed price of up to € 55 per tonne of CO2. From 2026, the certificates will then be awarded by auction, with a price range of 55-65 € / emission certificate and ton of CO2 being set for the first year. It has not yet been decided whether a price corridor will also be used in the following years. Calculated on the heating costs, these will increase by up to € 1.19 per square meter by 2025 if fossil fuels are used.

Also being discussed is the limitation of the apportionability to 50%, so that landlords would also have to bear part of the additional costs. The law aims to promote energy-efficient and climate-neutral building types and the use of renewable energies.

According to the German Federal Environment Agency, it is crucial that at the beginning there is a clear separation between the classic EU emissions trading sectors (energy and industry) and the new sectors (especially buildings and transport). Otherwise there is a risk that the reduction will mainly take place in the traditional sectors. A common system would therefore initially not provide sufficient financial incentives to say goodbye to climate-damaging technologies in buildings and mobility.

In the past week of trading, the prices for European emission rights (EUA) came under significant pressure due to the upcoming elections in the USA and the increasingly worsening corona crisis and fell a good seven percent on a weekly basis. This trend continues even at the start of the market today.

The total of 21.7 million emission rights, which will be auctioned in Leipzig this week, will also weigh on prices and it will remain interesting to see how much demand for the auctions is. In addition, the outcome of the elections in the USA will remain important, as will the further development of the corona pandemic in Europe.

(Average Quotes Exchange / OTC)
Instrument	23/10/2020	30/10/2020	Change
EUA (Spot-Market)	25.49 EUR	23.70 EUR	+0.54 EUR
EUA (December-2020-Future)	25.49 EUR	23.71 EUR	+0.65 EUR
CER (Spot-Market)	0.31 EUR	0.29 EUR	+0.03 EUR
ICE Brent Crude Oil (Benchmark Future)	41.64 USD	37.85 USD	-1.16 USD
EURO (Currency, Forex)	1.1860 USD	1.1648 USD	+0.0143 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 continued reluctance to buy due to political and economic risks had brought the price for European CO2 emission rights EUA to a new four-month low last week, which was just above the 23 euro mark. On Friday, however, prices recovered at the start of trading and ensured that the last week of trading ended with a weekly gain of more than 2%.

But it was not only the favorable purchase prices that motivated the buyers here, but also the report that the EU environment ministers were partially able to agree on measures to achieve climate neutrality in 2050, even if the topic will probably only be deepened by the European heads of government in December will be. Should a reduction target of 55% or even 60% be discernible as a reduction target for 2030, this should have a clearly bullish effect on the prices for EUA.

This week, a total of 14.4 million EUAs will be auctioned at the Leipzig EEX, followed by 21.7 million certificates in the coming week, which next Wednesday will also include 891,500 EUAA for aviation.

(Average Quotes Exchange / OTC)
Instrument	16/10/2020	16/10/2020	Change
EUA (Spot-Market)	24.95 EUR	25.49 EUR	+0.54 EUR
EUA (December-2020-Future)	24.84 EUR	25.49 EUR	+0.65 EUR
CER (Spot-Market)	0.28 EUR	0.31 EUR	+0.03 EUR
ICE Brent Crude Oil (Benchmark Future)	42.80 USD	41.64 USD	-1.16 USD
EURO (Currency, Forex)	1.1717 USD	1.1860 USD	+0.0143 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,

Three topics are currently dominating not only the news but also the sentiment on the markets: the presidential election in the USA, the possibility of an unregulated Brexit and the second wave of corona infections.

While the outcome of the US election on 3 November is unlikely to have a particularly strong impact on European markets, the virus situation in Europe remains a significant burden and politicians are finding it difficult to take the right decisions. There is a real feeling that both the people and the policy makers are torn between concern for life and health on the one hand and the burden on the economy on the other. A golden road is nowhere in sight even at the beginning of the second wave of infection.

European emissions trading was also unable to avoid the pressure of the indices in the past trading week and closed weaker again. Even the 25 euro mark for December contracts did not withstand the pressure and was undercut by a few cents. The announcements from Brussels to significantly increase the emission reduction target by 2030 initially only had a short-term effect in this context, but it will still have a significant impact on price development. The same applies to the start of the fourth trading period and the effect of the market stability reserve, which should by no means be underestimated.

(Average Quotes Exchange / OTC)
Instrument	09/10/2020	16/10/2020	Change
EUA (Spot-Market)	25.81 EUR	24.95 EUR	-0.86 EUR
EUA (December-2020-Future)	25.71 EUR	24.84 EUR	-0.87 EUR
CER (Spot-Market)	0.29 EUR	0.28 EUR	-0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	42.82 USD	42.80 USD	-0.02 USD
EURO (Currency, Forex)	1.1823 USD	1.1717 USD	-0.0106 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,

Research data from the Earth observation program Copernicus has shown that September 2020 was the warmest September ever recorded globally and, with a plus of 1.3 ° C, is close to the critical level of 1.5 ° C global warming.

Now a study by the University College in London together with the CDP – Carbon Disclosure Project has determined the costs of climate change. Without economic change and a serious reduction in global greenhouse gas emissions, annual costs would amount to more than 4 trillion US dollars by 20170. In 2200, the cost would even exceed $ 30 trillion. Furthermore, a decline of the global gross domestic product of 10% is to be expected, in 2100 the decline could already reach 25%.

If global warming can be kept below 2 ° C by the measures of the Paris Climate Protection Agreement, the annual global costs would be significantly cheaper at 1.5 trillion euros.

September 2020 should therefore be cause for concern from a purely economic point of view.

In the past week of trading, the prices for European pollution rights showed up under the pressure of the high auction volume of almost 22 million certificates and a lack of bullish news. This week, 14.4 million EUA will be auctioned on four trading days, which did not spread optimism either on Friday or at the start of trading today. The prices fell below the EUR 25.50 mark in the first few minutes of trading and, from a purely technical point of view, could break the EUR 25 mark.

This could be a welcome opportunity for buyers who want to stock up on certificates for 2020 already now.

(Average Quotes Exchange / OTC)
Instrument	02/10/2020	09/10/2020	Change
EUA (Spot-Market)	27.01 EUR	25.81 EUR	-1.20 EUR
EUA (December-2020-Future)	27.03 EUR	25.71 EUR	-1.32 EUR
CER (Spot-Market)	0.30 EUR	0.29 EUR	-0.01 EUR
ICE Brent Crude Oil (Benchmark Future)	39.14 USD	42.82 USD	+3.68 USD
EURO (Currency, Forex)	1.1714 USD	1.1823 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,

At the end of last week, the financial and commodity markets reacted nervously to the news that US President Trump had tested positive for the corona virus.

In addition, there are worrying numbers regarding the infection rate in many parts of the world, including Europe and the USA, where several New York neighborhoods are already threatened with another lockdown. In particular, this has caused the oil price to collapse again by 4.5% and drop it below the $ 40 mark.

The prices for European CO2 pollution rights also fell in the last week of trading and, after a cautious start to the week, were back below the EUR 26 mark on Friday. However, they recovered significantly over the course of the day to then close above EUR 27.00 and show a plus of 3.3% on a weekly basis compared to the previous week.

In the current trading week, a total of 20.8 million EUA will be auctioned on the Leipzig EEX on all five trading days. In addition, there are uncertainties regarding the state of health of the US President Donald Trump, which could mean high volatility for the financial and commodity markets as well as for the energy markets.

The EUA is currently showing an optimistic start to trading and, in terms of chart technology, the signs are rather bullish. In any case, an interesting week is ahead.

(Average Quotes Exchange / OTC)
Instrument	25/09/2020	05/10/2020	Change
EUA (Spot-Market)	26.15 EUR	27.01 EUR	+0.86 EUR
EUA (December-2020-Future)	26.17 EUR	27.03 EUR	+0.86 EUR
CER (Spot-Market)	0.30 EUR	0.30 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	41.84 USD	39.14 USD	-2.70 USD
EURO (Currency, Forex)	1.1631 USD	1.1714 USD	+0.0083 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