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UN Emission Premium for 2010 Widens to Record on Scrutiny
2010-09-07 17:02:21.600 GMT
By Mathew Carr and Catherine Airlie
Sept. 7 (Bloomberg) -- The premium of United Nations
emission credits for delivery in 2010 over 2012 surged to a
record as regulators scrutinized the issuance of new credits.
The spread, traded as a separate contract on the European
Climate Exchange in London, jumped 9.5 percent to 92 euro cents
($1.17) a metric ton. UN-overseen regulators are reviewing
supply of credits to projects that destroy hydrofluorocarbon-23
gas. Four such projects are waiting this month to hear if their
requests for issuance face delay, according to a UN website that
tracks projects.
Some traders may be buying back 2010 futures because they
no longer expect issuance and don't need their previously made
hedge, Andrew Ager, the London head of carbon and emissions at
Prudential Financial Inc.'s Bache Commodities Ltd., said in an
e-mail. They then sell 2011 futures to "roll" the hedge
forward, he said. "It is one way of not realizing a loss and of
moving the position across, but at a cost."
The spread has widened from 21 cents at the end of July as
the Clean Development Mechanism executive board based in Bonn
delays issuances to HFC-23 projects as they conduct reviews.
Credits that destroy that gas make up about half the supply in
the UN CDM market.
UN credits for December rose 1.3 percent to 14.15 euros a
ton as of 5:33 p.m. in London. EU allowances for December
advanced 0.2 percent to 15.75 euros. The premium of 2010 EU
allowances to UN credits narrowed by 8.6 percent to 1.60 euros,
the smallest gap since Aug. 19.
For Related News and Information:
Top Power Stories: PTOP <GO>
Emissions-trading stories: NI ENVMARKET BN <GO>
Today's top energy news: ETOP <GO>
European power-markets home page: EPWR <GO>
--Editors: Rob Verdonck, Randall Hackley
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
Catherine Airlie at +44-20-7073-3308 or
cairlie@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss on +44-20-7073-3520 or sev@bloomberg.net
