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 (05/02/2024)

Dear Madam or Sir,

Last week, the European Commission initiated infringement proceedings against Germany and 25 other countries for failing to implement a directive on EU emissions trading (EU ETS).

This directive concerned, among other things, the creation of a social climate fund, the new EU emissions trading system for transport and buildings, which is due to start in 2027, and the extension of emissions trading to shipping.

The European Commission has also drawn up a draft climate target for 2040, which, according to the German Press Agency, envisages a 90% reduction in greenhouse gas emissions compared to 1990 and is to be presented this week.

The most important component here is the “Fit for 55” legislative package, which includes extensive measures for industry, the energy sector, the transport sector and agriculture. 

According to the draft, a reduction of 90 – 95% by 2040 is required in line with the recommendations of the Scientific Advisory Board in order to prevent key tipping points in the climate system and “potentially catastrophic impacts on human society and ecosystems” from being exceeded.

As the EU’s central market-based instrument is CO2 emissions trading, the draft is also likely to have an impact on the future design of emissions trading, such as the inclusion of additional sectors and the increase in the annual reduction factor of the emission allowances to be auctioned.

Last week, prices in EU emissions trading fluctuated within a relatively moderate range between EUR 61.23 and EUR 65.16 in the EUA December 2024 benchmark contract.

As the Polish auction will not take place on Wednesday, a total of 11,094,500 EUAs will be auctioned on the other trading days.

    (Average Quotes Exchange / OTC)       
Instrument26/01/2402/02/24Change
EUA (December-2024-Future)63.58 EUR63.40 EUR-0.18 EUR
VER (Natural Carbon Offsets)1.33 USD1.59 USD+0.26 USD
VER (CORSIA eligible Carbon Offsets)0.77 USD0.88 USD+0.11 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)83.15 USD77.40 USD-5.75 USD
EURO (Currency, Forex)1.0848 USD1.0788 USD-0.0060 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 (29/01/2024)

Dear Madam or Sir,

In particular, the protagonists and supporters of a German party that idolises diesel and because of which millions of people are currently taking to the streets in Germany often argue that it would help nothing for climate protection if only Germany and Europe were to reduce greenhouse gases, while the rest of the world would do nothing of the sort.

But this argument is based on faith and not on facts and knowledge and at best serves to dumb people down. The fact is that most of the world’s wind power is generated in China, followed by the USA, Germany and Brazil. Without this, the increase in greenhouse gases in the atmosphere would have been even more significant.

Last Thursday, the Finnish “Centre of Research on Energy and Clean Air”, or “CREA” for short, published a report showing that green investments accounted for 40% of the growth in China’s gigantic economic output last year.

This includes electromobility, wind and solar energy systems, rail transport, hydropower, nuclear energy and energy storage. A total of USD 890 billion was invested in these areas in China, which enabled economic growth of 5.2%; without these investments, growth would have been significantly lower at 3.0%.

What’s more, pricing of greenhouse gas emissions has already been introduced in many countries around the world, following the European model. The emission of one tonne of CO2 currently costs the equivalent of US$ 10.27 in China, US$ 6.72 in South Korea, US$ 70.90 in New Zealand and US$ 28.66 in California, the world’s fourth largest economy.

Prices in EU emissions trading hardly moved at all last week on a weekly closing price basis, but they broke free from the steep sideways-downward trend channel over the course of the week and moved in a trading range between EUR 60.86 and EUR 66.43 in the benchmark December 2024 contract.

In this trading week, a total of 13,404,500 EUAs will be offered for auction on all five trading days on the European Energy Exchange.

    (Average Quotes Exchange / OTC)       
Instrument19/01/2426/01/24Change
EUA (December-2024-Future)63.65 EUR63.58 EUR-0.07 EUR
VER (Natural Carbon Offsets)1.27 USD1.33 USD+0.06 USD
VER (CORSIA eligible Carbon Offsets)0.66 USD0.77 USD+0.11 USD
nEZ (German National Carbon Units)45.00 EUR45.00 EUR+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)77.88 USD83.15 USD+5.27 USD
EURO (Currency, Forex)1.0898 USD1.0848 USD-0.0050 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