Non-industrial-gas credits already command a premium of about 10 cents to 50 cents a ton in the over-the-counter market, according to Gilles Corre, a carbon broker at Tullett Prebon Plc in London. The spread between credits likely to be accepted by the EU and those that won't is not well traded yet, Corre said yesterday by phone.
"There is the potential for this to widen further," according to Aimie Parpia, an analyst in London at Bloomberg New Energy Finance, which provides research and data on the carbon markets.
Exchanges may soon offer futures contracts that differentiate offsets, splitting the market further, Parpia said yesterday by e-mail. CERs valid in phase three of the EU program may rise to 24 euros a ton by 2016, while banned credits may rest at 12 euros, she forecast last week.
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UN Emission Credits Approach Two-Month Low as EU Considers Ban
2010-10-28 16:53:53.766 GMT
By Mathew Carr
Oct. 28 (Bloomberg) -- United Nations emission offsets for
2012 dropped to near the lowest level in two months as European
Union regulators considered a ban on some offsets in 2013.
UN Certified Emission Reduction credits for December 2012
were down 1.4 percent at 12 euros ($16.72) a metric ton as of
5:16 p.m. on London's European Climate Exchange after falling to
11.96 euros a ton, the lowest price since Aug. 18.
EU carbon dioxide allowances for December fell 1.4 percent
to 14.89 euros a ton as Chancellor Angela Merkel's plan to
prolong Germany's use of nuclear power cleared parliament after
a debate lasting more than six hours as the opposition pledged a
court challenge. Nuclear stations require no carbon permits,
unlike coal and natural-gas electricity plants.
UN credits can be used for compliance in the EU system, the
world's biggest carbon market. The European Commission,
regulator of the program, plans to present a proposal next month
on offsets that may include a ban on credits from projects
cutting nitrous oxide and hydrofluorocarbons as soon as 2013.
That year is the first of the program's eight-year third phase.
"The weakening offset market seems to be reacting to the
slow drip-feed of news surrounding the European Commission's
likely action on industrial gas offsets in phase three,"
IDEAcarbon, the London company that rates emission projects,
said today in an e-mailed research note.
The CERs for 2012 have fallen 7.8 percent this month.
"The commission is considering restrictions on certain
types of project related to industrial gases HFC-23 and nitrous
oxide," Yvon Slingenberg, emissions-unit head at the
commission's climate department, said in an interview yesterday
in Brussels. "An outright ban is one of the options."
Already Split
Non-industrial-gas credits already command a premium of
about 10 cents to 50 cents a ton in the over-the-counter market,
according to Gilles Corre, a carbon broker at Tullett Prebon Plc
in London. The spread between credits likely to be accepted by
the EU and those that won't is not well traded yet, Corre said
yesterday by phone.
"There is the potential for this to widen further,"
according to Aimie Parpia, an analyst in London at Bloomberg New
Energy Finance, which provides research and data on the carbon
markets.
Exchanges may soon offer futures contracts that
differentiate offsets, splitting the market further, Parpia said
yesterday by e-mail. CERs valid in phase three of the EU program
may rise to 24 euros a ton by 2016, while banned credits may
rest at 12 euros, she forecast last week.
For Related News and Information:
Emissions-trading stories: NI ENVMARKET BN <GO>
Today's top energy news: ETOP <GO>
European power-markets home page: EPWR <GO>
--With assistance from Ewa Krukowska in Brussels. Editors: John
Buckley, Rob Verdonck
To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
