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Emissions Trading / Carbon Market News (26/08/2019)

Dear Sir or Madam,

On the last day of the G7 conference in Biarritz, France, climate protection is on the program. After the experience of the past with Mr Trump, it is no wonder that for the first time in the history of the summit, no joint final declaration is planned. All the more surprising is the news that the US President plans to enrich the host’s compulsory press conference this afternoon with his presence, which would also be a novelty.

The Senator of Vermont and presidential candidate for the Democrats 2020, on the other hand, presented a resolution on climate change last Thursday, setting out the goals and principles for the US fight against climate change. Unlike the incumbent president, Sanders recognizes that climate change is a major concern and that the United States must reduce its greenhouse gas emissions to zero by the middle of the century. As the news portal vox.com reported, most of the other presidential candidates have set the year 2050 as the target for carbon neutrality. Sanders’ plan, however, also sets an interim target: By 2030, transport and power generation, the two largest sources of emissions in the US, should be decarbonised, reducing US emissions by 71 percent. The plan also provides for the US to help developing countries reduce their emissions by 36 percent by 2030.

In the market for European Pollution Rights, the Bears also set the tone last week. Apparently under the impression of the further escalating trade dispute between the US and China, the price of oil has clearly given way and thus no turnaround could be initiated for EUAs. At the London ICE, a price of just under 25 euros was even called in the short term, which represents a nine-week low. The massive price increase in June and July was thus completely consumed. In today’s early trading, however, the market is clearly up and has already gained almost 50 cents.

  (Average Quotes Exchange / OTC)      
Instrument 16/08/2019 23/08/2019 Change
EUA (Spotmarket) 26.00 EUR 25.15 EUR -0.85 EUR
EUA (December-2019-Future) 25.96 EUR 25.10 EUR -0.86 EUR
CER (Spotmarket) 0.20 EUR 0.20 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 58.94 USD 58.20 USD -0.74 USD
EURO (Currency, Forex) 1.1097 USD 1.1153 USD +0.0056 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

Posted on

Emissions Trading / Carbon Market News (19/08/2019)

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

Posted on

Emissions Trading / Carbon Market News (05/08/2019)

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

Posted on

Emissions Trading / Carbon Market News (2019-07-30)

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

Posted on

Emissions Trading / Carbon Market News (22/07/2019)

Dear Sir or Madam,

The world’s most northerly weather station in the North of Canada experienced a very unusual heatwave last week, recording a record high of 21 ° C. The station is located at 82 degrees north latitude and is the northernmost permanently inhabited place on earth. This heat wave causes fires of unprecedented proportions to erupt in the Arctic.

The current data on the use of fossil fuels for power generation show how CO2 emissions trading serves climate protection. As a result of higher prices, 11.5 million tonnes of energy were produced in June 2019; in June 2018 it was still 17 million tons. This is particularly related to the fact that the rise in CO2 allowances has led to more than 60% increase in electricity produced by gas-fired power plants from 2.3 to 3.7 billion kilowatt hours.

According to the Fraunhofer Institute for Solar Energy Systems (ISE), the cost of generating lignite-fired power was 30-40 euros per megawatt-hour due to high CO2 prices, while electricity from gas-fired power plants is 24 – 28 euros. This is pleasing insofar as electricity from gas generates only half as much CO2 as is the case with lignite. The more expensive the CO2 certificates are, the less CO2 is emitted in power generation. At prices that would be well above the 30-euro mark, coal-fired power plants would be unprofitable and shut down for this reason alone. That would precede the coal exit in 2038.

Last week, the EUA continued to be bullish, peaking at EUR 29.50 at the beginning of the week. However, whether the 30-euro mark is to be tested depends on a strong market environment in the energy sector, with crude oil in particular currently weakening. At the start of the week, the EUA again rose above the 29 euro mark.

(Average Quotes Exchange / OTC)      
Instrument 12/07/2019 19/07/2019 Change
EUA (Spotmarket) 28.76 EUR 28.85 EUR +0.09 EUR
EUA (December-2019-Future) 28.79 EUR 28.89 EUR +0.10 EUR
CER (Spotmarket) 0.21 EUR 0.21 EUR +0.00 EUR
ICE Brent Crude Oil (Benchmark Future) 66.79 USD 62.52 USD -4.27 USD
EURO (Currency, Forex) 1.1269 USD 1.1220 USD -0.0049 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