Emissions Trading / Carbon Market News (27/05/2024)

Ladies and Gentlemen,

Carbon pricing instruments currently cover around a quarter of global greenhouse gas emissions. There are currently 75 carbon taxes and emissions trading systems worldwide, and the trend is rising.

According to a report by the World Bank, revenue from carbon pricing reached record levels last year, exceeding the USD 100 billion mark for the first time. More than half of the funds flowed directly into climate and nature conservation programmes.

In our view, the introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM) will also lead to the introduction of carbon trading systems in other countries, which will have a stronger local steering effect so that the funds generated in this way can be used in the respective country and not channelled into the revenues of the EU Emissions Trading Scheme.

In the last trading week, the price of carbon emission allowances in EU Emissions Trading System rose by almost five euros or nearly seven per cent. The price has left important resistance at just under EUR 74 behind and has established itself above the 200-day-line, which is currently at EUR 72.40. If nothing fundamentally bearish happens and there is no major profit-taking, there is much to suggest that the price will remain above the 200-day line this week and not leave the upward trend channel. This could even lead to a test of the EUR 80 mark in the benchmark December 24 contract.

There will be no auction on the Leipzig EEX today (Monday) due to the Spring Bank Holiday and the Polish auction will also not take place on Wednesday as scheduled. As a result, only a total of 7,995,000 EUAs will be auctioned this week, which corresponds to just around 60% of the previous week’s auction volume.

    (Average Quotes Exchange / OTC)       
Instrument17/05/2424/05/24Change
EUA (December-2024-Future)70.69 EUR75.61 EUR+4.92 EUR
VER (Natural Carbon Offsets)1.09 USD1.02 USD-0.07 USD
VER (CORSIA eligible Carbon Offsets)0.42 USD0.40 USD-0.02 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)84.30 USD82.33 USD-1.97 USD
EURO (Currency, Forex)1.0868 USD1.0847 USD-0.0021 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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

Emissions Trading / Carbon Market News (13/05/2024)

Ladies and Gentlemen,

Peter Wiese is the environmental policy spokesman for the largest political group in the European Parliament, the Christian Democratic EPP, where he is responsible for emissions trading and climate protection.

In view of the current 30% drop in the price of EU emission allowances compared to last year’s highs, Mr Wiese explained last week that the EPP does not believe it would be desirable for prices to quickly rise back into the three-digit range due to weakening European industrial production.

According to Wiese, the decarbonisation of industry will not work quickly enough and a deindustrialisation of Europe would lead to Europeans losing their prosperity and Europe not being a role model for the rest of the world. For this reason, Liese and his parliamentary group have insisted that the main effects of the tightening of European climate targets in emissions trading should not materialise until 2027, such as a reduction in the issue of free certificates but front-loading of emission allowances.

However, he also believes that the politically desired slump in the rise in European carbon prices is only temporary and emphasised that no one should be under any illusions: “Those who invest in clean technologies now will benefit in the long term. Those who believe they can simply carry on as before in the coming decades will be penalised”.

Last week, the price of the EUA-benchmark-contract December 2024 broke through the 200-day line several times, but closed below this strong resistance at the end of each trading day.

The 200-day-line currently stands at EUR 73.22 and last week’s closing price is just over one euro away from it. It will be interesting to see whether the price remains within the current upward trend channel this week and thus possibly breaks through the 200-day line or whether it heads in the direction of the 38-day line, which is currently at 67.79 euros.

Following last week’s holiday-related lower auction volume of 8.5 million EUAs, 12,000,500 emission allowances will be auctioned on the EEX this week, of which 906,000 EUAs are for the aviation industry, although these can now also be used for stationary installations.

    (Average Quotes Exchange / OTC)       
Instrument03/05/2410/05/24Change
EUA (December-2024-Future)72.01 EUR71.91 EUR-0.10 EUR
VER (Natural Carbon Offsets)0.96 USD1.01 USD+0.05 USD
VER (CORSIA eligible Carbon Offsets)0.38 USD0.44 USD+0.06 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)82.67 USD82.62 USD-0.05 USD
EURO (Currency, Forex)1.0757 USD1.0765 USD+0.0008 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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

Emissions Trading / Carbon Market News (06/05/2024)

Ladies and Gentlemen,

At the beginning of last week, the leading Western industrialized nations (G7) agreed in Turin (Italy) to phase out coal by 2035. Italy holds the G7 presidency this year.

This is three years earlier than Germany had legally stipulated. In North Rhine-Westphalia, the coal phase-out has already been set for 2030, but in the east of the republic, Saxony-Anhalt, Saxony and Brandenburg, there were already reservations about a phase-out before 2038. Now that 2035 has been set, the structural change in these German federal states must be driven forward more quickly.

As suspected last week, the price of emission rights moved between the 38- and 200-day lines in the past trading week, even though a brief upward breakout from this price range was attempted on Friday.

On a weekly closing price basis, there was an increase of more than two euros and a closing price for the December benchmark contract of just above the 72 euro mark.

As this Thursday is Ascension Day, the auctions on Thursday and Friday have been cancelled. As a result, only 8,509,000 EUAs will be auctioned on the EEX energy exchange in Leipzig.

    (Average Quotes Exchange / OTC)       
Instrument26/04/2403/05/24Change
EUA (December-2024-Future)69.92 EUR72.01 EUR+2.09 EUR
VER (Natural Carbon Offsets)1.40 USD0.96 USD-0.44 USD
VER (CORSIA eligible Carbon Offsets)0.59 USD0.38 USD-0.21 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)88.06 USD82.67 USD-5.39 USD
EURO (Currency, Forex)1.0690 USD1.0757 USD+0.0067 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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

Emissions Trading / Carbon Market News (19/02/2024)

Dear Madam or Sir,

Last week, the EU decided to support CO2-intensive industry, which is subject to levies in EU emissions trading EU ETS, with a total of four billion euros to reduce 60% of its carbon emissions within three years and 90% within 15 years. 

In addition, the German Federal Ministry of Economics has announced that Germany intends to have the EU emission allowances that are no longer needed due to the coal phase-out cancelled and therefore not transferred to the Market Stability Reserve (MSR). This would possibly have happened indirectly anyway, as the MSR will retire all allowances above its maximum quantity of 400 million EUAs from this year onwards. The exact amount is not yet known.

EU emission allowances have lost almost 30% since the beginning of this year, carbon credits used for the international aviation industry (CORSIA) have gained 29% after months of decline and voluntary carbon credits based on nature projects also appear to have bottomed out with an increase of 65%.

According to various analysts, the prices of voluntary emissions trading certificates will rise by several hundred and even thousand per cent in the coming years, which is why many funds and investors are already beginning to discover this asset class for themselves. However, good advice on which types of certificates could be among the most promising is essential here.

At the end of the week, EU emission allowances were relatively stable compared to previous weeks, falling by only 2.8%. The trading range of the December 2024 EUA futures was not particularly volatile either, with prices ranging between 55.41 and 59.05 Euro.

From a technical point of view, it would now be logical for the EUA to tackle the path above the EUR 60 mark this week, but in the absence of bullish impetus, a further decline could also be possible; after all, the delivery deadline has now been moved from the end of April to the end of September, which makes the usual bullish phase in the first quarter obsolete due to higher demand.

    (Average Quotes Exchange / OTC)       
Instrument09/02/2416/02/24Change
EUA (December-2024-Future)58.79 EUR57.17 EUR-1.62 EUR
VER (Natural Carbon Offsets)1.42 USD1.50 USD+0.08 USD
VER (CORSIA eligible Carbon Offsets)0.78 USD0.76 USD-0.02 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)81.67 USD82.75 USD+1.08 USD
EURO (Currency, Forex)1.0782 USD1.0775 USD-0.0007 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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

Emissions Trading / Carbon Market News (15/01/2023)

Dear Madam or Sir,

Following several earthquakes, a volcano has erupted in Iceland for the second time in two weeks, emitting large quantities of dust, ash and lava as well as CO2.

Over the past millions of years, volcanoes have ensured that there is sufficient CO2 in the atmosphere to prevent the heat from the sun’s rays in the atmosphere from being quickly reflected back into space, thus creating temperatures conducive to life.

Deniers of human-made climate change like to point this out while ignoring the fact that humans currently emit 100 times more greenhouse gases into the atmosphere each year than all volcanic eruptions combined. As a result, the balance is significantly disturbed and the so-called greenhouse gas effect leads to an increase in the global average temperature with the known consequences, such as extreme weather events, which occur much more frequently the higher the global temperature rises.

These extreme weather events occur because the atmosphere absorbs more moisture, which leads to exceptional regional precipitation and the jet stream responsible for the respective weather conditions slows down in its movement. This in turn leads to weather patterns remaining stable for longer, resulting in either months of rainy weather, as was the case this winter, or months of drought, as was the case in 2018/2019.

These correlations should be recognized by agriculture, then the further subsidization of fossil fuels, which cause this climate change and thus cause more frequent crop failures, would not be high on the list of priorities.

Last Thursday, the auction calendar for national emissions trading in Germany was published by the Leipzig-based EEX. The first auction will take place much later this year than last year, when the auctions started on 10/01/2023.

As before, the nEHS auctions will take place on Tuesdays and Thursdays.

The following dates are of special interest:

  • 05/03/2024 First auction in national emissions trading 2024 (nEZ23/nEZ24)
  • 19/09/2024 Last auction for 2023 nEZ
  • 05/12/2024 Last auction for 2024 nEZ in 2024

The first auction for EU emission allowances (EUAs) takes place today and it will be interesting to see what demand will look like after EUAs lost almost 14% in the last week alone and even briefly fell below the EUR 65 mark. This price level was last seen 15 months ago. However, if the current price level holds, a technical counter-reaction back above the EUR 70 mark would be likely; if not, then the EUR 60 mark would merely be a psychological resistance level.

    (Average Quotes Exchange / OTC)       
Instrument05/01/2412/01/24Change
EUA (December-2024-Future)76.35 EUR65.81 EUR-10.54 EUR
VER (Natural Carbon Offsets)1.18 USD1.81 USD+0.63 USD
VER (CORSIA eligible Carbon Offsets)0.54 USD0.74 USD+0.20 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)78.75 USD78.13 USD-0.62 USD
EURO (Currency, Forex)1.0943 USD1.0949 USD+0.0006 USD

(The VER quotes are average rates (carboncredits.com), which can be used within the framework of CORSIA and voluntary carbon offsetting. 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