Tag: carbon credits

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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

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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

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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

Posted on

Emissions Trading / Carbon Market News (08/01/2024)

Dear Madam or Sir,

In 2023, the German government generated a record amount of more than 18 billion euros from carbon emissions trading, which was five billion or 40% more than in the previous year.

A total of almost 8 billion euros was generated from the auctions in the European Emissions Trading system EU ETS and almost 11 billion euros in the national Emissions Trading System nEHS. This revenue is likely to continue to rise as the prices for national emissions certificates are now 50% more expensive than in 2023.

The fact that emissions trading has a strong steering effect is shown by the decline in the use of lignite in Germany, which in 2023 will have reached the level of 60 years ago, as published by the think tank Agora Energiewende This was mainly due to the expansion of renewable energies, which increased by 12% last year.

Compared to the previous year, carbon emissions therefore fell by 73 million tonnes to 673 million tonnes in 2023, the largest decrease ever. At 138 terawatt hours, wind energy was ahead of lignite for the first time last year, with 132 TWh.

However, there are also areas that clearly missed their targets, such as the transport sector once again. Here, a reduction of only 3 million to 145 million tonnes of CO2 was recorded, i.e. 12 million tonnes too much than planned.  This also applies to the building sector, which also showed a decrease of 3 million tonnes to 109 million tonnes of CO2, which is 8 million tonnes above the target.

Nevertheless, the installation of more than 1,000,000 solar systems last year and an increase of 14 gigawatts of energy generation also set a record. Commercial and private installations each accounted for half of this figure.

As Germany is the largest industrialised nation in the EU, these figures have put the price of CO2 emission allowances in the EU ETS under considerable pressure in the past trading week, which is why prices have fallen below the €80 mark again, down 5%.

However, the further we move towards the end of the submission deadline, a bullish development is likely, which is why it could be wise to use this weak phase to buy parts of your EUA portfolio.

This week, there are still no auctions on the EEX; they will only start again for EUAs in the following week. Prices could also be driven up by the fact that a prolonged cold front has arrived in Europe, which will increase demand for energy accordingly.

    (Average Quotes Exchange / OTC)       
Instrument29/12/2305/01/24Change
EUA (December-2024-Future)80.37 EUR76.35 EUR-4.02 EUR
VER (Natural Carbon Offsets)0.91 USD1.18 USD+0.27 USD
VER (CORSIA eligible Carbon Offsets)0.59 USD0.54 USD-0.05 USD
nEZ (German National Carbon Units)30.00 EUR45.00 EUR+15.00 EUR
ICE Brent Crude Oil (Benchmark Future)76.83 USD78.75 USD+1.92 USD
EURO (Currency, Forex)1.1036 USD1.0943 USD-0.0093 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