Tag: Voluntary Carbon Credits

Dear Sir or Madam,

The European Commission has decided that EU member states will be allowed to auction around 4% more European Emission Allowances (EUAs) in the period from September to December 2024 than in the same period last year. The reason for this was the cost of switching the energy supply in order to end dependence on Russia.

A few days ago, the European Energy Exchange (EEX) published its current auction calendar for the period from September to December of this year.

This means that 13,404,500 EUAs will be auctioned on all five trading days this week, when the Polish primary market auction takes place on a regular basis, compared to 14,582,500 in a comparable week in September.

In addition, there will only be a few auction-free days, as in the weeks in which there are usually no Polish auctions on Wednesdays, either EU auctions are held or Northern Ireland auctions.

In total, 8.2 million more EUAs will be auctioned than was planned in the original auction calendar, which would mean additional revenue of 574.0 million euros at the current price of around 70 euros.

The last auction of 3,248,000 EUAs this year will take place on Monday, 16 December 2024.

In the previous trading week, EUA prices repeatedly found support at the 200-day and 38-day lines, although they were only able to overcome the strong resistance of a sideways downward resistance line intraday.

The 38-day line is currently turning slightly upwards at EUR 69.55, while the 200-day line is still showing bearish tendencies and currently stands at EUR 67.44.

If the EUAs are unable to sustainably break through the resistance of the sideways downwards line in the new trading week, the price will fall below the EUR 70 mark again and probably test the support of the 38 and 200-day lines.

(Average Quotes Exchange / OTC)
Instrument	02/08/24	09/08/24	Change
EUA (December-2024-Future)	70.58 EUR	70.14 EUR	-0.44 EUR
VER (Natural Carbon Offsets)	0.78 USD	0.48 USD	-0.30 USD
VER (CORSIA eligible Carbon Offsets)	0.18 USD	0.14 USD	-0.04 USD
nEZ (German National Carbon Units)	45.00 EUR	45.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	78.17 USD	80.32 USD	+2.15 USD
EURO (Currency.. Forex)	1.0911 USD	1.0914 USD	+0.0003 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

Dear Sir or Madam

The German Federal Ministry of Economics and Climate Protection (BMWK) has presented a 142-page draft bill to amend the Greenhouse Emissions Trading Act (TEHG).

According to the draft, all installations such as stationary installations, aircraft, ships, combustibles and fuels are to be regulated in one law in future. For the years 2024 to 2026, however, the changes are to be implemented in the existing legal structure.

In addition, fossil fuels in agriculture, forestry, rail transport and the incineration of waste are to be included in future. Biomass plants, some of which have been able to make a profit from the allocation of free allowances to date, will no longer be subject to reporting or surrender obligations and will therefore no longer receive free allocations.

It remains to be seen what changes will be made in the committees before the amendment to the TEHG becomes legally binding.

In China, 2,257 power generation plants are currently priced via the national emissions trading scheme. The price for a tonne of CO2 there is currently the equivalent of EUR 11.70 and has risen by 15.1% since the beginning of the year. Since the start of CO2 emissions trading in China, the price has almost doubled.

In the short term, China plans to use the now established emissions trading system to reduce emissions in line with the EU emissions trading scheme. To this end, emitters from other sectors will be successively subjected to the trading obligation, which is certainly also a success of the EU’s CBAM (Carbon Borderline Adjustment Mechanism), as otherwise the pricing of imports from China would be almost entirely the responsibility of the EU.

And prices in EU emissions trading are still far removed from Chinese prices. In the last trading week, they rose by 4% and closed above the EUR 70 mark per tonne of CO2.

After overcoming the 200-day line, which currently stands at EUR 67.80, the 38-day line, which currently stands at EUR 69.51, was also overcome. The bullish trend was only halted by a resistance line, which is currently in the region of EUR 71.30.

However, depending on how the current geopolitical tensions in the Middle East develop, the share price could either overcome the resistance line and continue towards the EUR 80 mark or fall back to the EUR 65 region.

With the exception of Wednesday, a total of 11,094,500 EUA will be auctioned on the EEX in Leipzig this week.

(Average Quotes Exchange / OTC)
Instrument	26/07/24	02/08/24	Change
EUA (December-2024-Future)	67.87 EUR	70.58 EUR	+2.71 EUR
VER (Natural Carbon Offsets)	0.98 USD	0.78 USD	-0.20 USD
VER (CORSIA eligible Carbon Offsets)	0.20 USD	0.18 USD	-0.02 USD
nEZ (German National Carbon Units)	45.00 EUR	45.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	80.63 USD	78.17 USD	-1.06 USD
EURO (Currency.. Forex)	1.0855 USD	1.0911 USD	+0.0056 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

Dear Sir or Madam,

Every week, several million EU emission allowances are auctioned on the Leipzig EEX, but what are these revenues used for?

Last Friday, the EU paid out a total of almost 3 billion of these via the modernisation fund to support 39 energy projects. These are intended for the reduction of greenhouse gas emissions in the agriculture, industry, transport and energy sectors, such as the expansion of renewable energies.

The modernisation fund particularly supports EU member states with a lower gross national product that are currently still heavily dependent on coal and helps them to carry out investments in line with the REPowerEU plan and the “Fit for 55” package.

However, revenues from the auctioning of carbon emission allowances will be lower if prices fall, which is naturally the case when demand is lower.

Last week, prices remained under pressure and moved in a range of €65.78 to €69.09, visibly below the 200-day line, which currently stands at just over €70.

In addition to the suboptimal economic development, particularly in Germany, the lower demand is also due to the expansion of renewable energies, which, according to analysts at London-based Energy Aspects, has already led to a year-on-year decline of 43 million tonnes of CO2 in the first half of the year. They expect a further decrease of 14 million tonnes in the third quarter of 2024.

However, as the deadline for submitting emission allowances for the previous year was changed from the end of April to the end of September for the first time this year, demand could pick up again in the coming months, which should also be helped by the halving of the auction volume in August. 

Insofar as the price of EUAs continues to move in the downward trend channel that began at the start of last month, prices below the EUR 65 mark would also be possible and this would appear to be a good opportunity for buyers to stock up on at least some of their open demand.

(Average Quotes Exchange / OTC)
Instrument	21/06/24	28/06/24	Change
EUA (December-2024-Future)	68.13 EUR	67.47 EUR	-0.66 EUR
VER (Natural Carbon Offsets)	0.99 USD	1.01 USD	+0.02 USD
VER (CORSIA eligible Carbon Offsets)	0.38 USD	0.43 USD	+0.05 USD
nEZ (German National Carbon Units)	45.00 EUR	45.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	85.18 USD	85.69 USD	+0.51 USD
EURO (Currency., Forex)	1.0691 USD	1.0707 USD	+0.0016 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

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)
Instrument	17/05/24	24/05/24	Change
EUA (December-2024-Future)	70.69 EUR	75.61 EUR	+4.92 EUR
VER (Natural Carbon Offsets)	1.09 USD	1.02 USD	-0.07 USD
VER (CORSIA eligible Carbon Offsets)	0.42 USD	0.40 USD	-0.02 USD
nEZ (German National Carbon Units)	45.00 EUR	45.00 EUR	+0.00 EUR
ICE Brent Crude Oil (Benchmark Future)	84.30 USD	82.33 USD	-1.97 USD
EURO (Currency, Forex)	1.0868 USD	1.0847 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