2010/08/31

yest(BN) EU CO2 Head for Biggest Monthly Gain Since April on

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EU CO2 Head for Biggest Monthly Gain Since April on UN Offsets
2010-08-31 16:38:18.459 GMT


By Catherine Airlie
Aug. 31 (Bloomberg) -- European Union carbon permits are
poised for their steepest monthly gain since April as supplies
of United Nations' offsets have been halted while the UN
Executive Board reviews HFC-23 destruction projects.
EU permits for December fell 1 percent to 15.29 euros
($19.43) a metric ton at 5:15 p.m. on London's European Climate
Exchange. The contract has gained 8.1 percent this month.
Carbon permits have risen on concern of "massive supply
cuts" from the UN's review of HFC-23 reduction projects,
Emmanuel Fages, a Paris-based analyst with Orbeo, the carbon-
trading venture of Societe Generale SA and Rhodia SA, said in an
e-mailed report late yesterday. "We expect this dynamic to
continue during the coming week, and possibly later, as the
larger market participants return from the summer break and take
the new fundamental situation into account."
EU permits to emit 1.79 million tons of carbon dioxide have
traded on ECX so far this month, about 33 percent less than
volumes bought and sold in July.
European power stations and factories can use UN offsets to
meet emissions caps. A cut or delay in the issuance of credits
may raise demand for EU permits.
The spread between EU permits and United Nations Certified
Emission Reductions for December widened 1 percent to 1.94 euros
a ton. The spread, traded as a separate contract on ECX, has
risen from 1.55 euros since Aug. 19 after regulators said they
are reviewing projects that reduce hydrofluorocarbons, fueling
speculation that the supply of credits will plunge.

For Related News and Information:
Emission market news NI ENVMARKET <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>

--Editors: Raj Rajendran, Stephen Cunningham.

To contact the reporter on this story:
Catherine Airlie in London at +44-20-7073-3308 or
cairlie@bloomberg.net

To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net