Is it worth buying CO2 certificates?
CO2 certificates paid off for the first time in 2018. But nobody knows whether it will stay that way.
IIn the past year, buying CO2 certificates was definitely worth it. These were one of the few investments that posted strong gains. For example, a Commerzbank CO2 certificate with the securities identification number CZ549S increased from EUR 7.50 to around EUR 24 over the course of the year.
However, the price movement was anything but continuous. 2018 was the first year in which buying CO2 certificates was really worthwhile. Previously, the European emissions trading system was designed to be very industry-friendly. Abundant certificates were issued for energy and industrial companies and the price fell accordingly.
In the meantime, politics has reduced the number of certificates. The emission of CO2, to which the certificates entitle, should become more expensive and encourage savings. The price development of CO2 therefore remains strongly influenced by political decisions.
Investors should know that. In addition, you do not buy the original CO2 certificates on the Leipzig energy exchange EEX or the London ICE, but rather products specially designed for private investors. Since, unlike the industry, they do not really need the certificates on a specific date for their CO2 emissions, the underlying contracts have to be renewed again and again.
This is called roles in financial jargon and in most cases is associated with losses. In years with such strong price gains as in 2018, they will of course be far more than compensated for. Whether or not years like this will repeat itself is in the stars.