(BN) EU Carbon Rises to Highest Price Since Oct. 27 as Gas


EU Carbon Rises to Highest Price Since Oct. 27 as Gas Jumps
2010-11-22 09:50:21.603 GMT

By Mathew Carr and Chanyaporn Chanjaroen
Nov. 22 (Bloomberg) -- European Union carbon dioxide
permits rose to their highest price since Oct. 27 as natural gas
jumped and Societe Generale forecast emission rights would
advance more than any other commodity in a group of 22.
EU CO2 prices will gain 35 percent through the fourth
quarter of 2011, according to analysts at the Paris-based bank.
Copper is second with estimated gains of 23 percent, followed by
palladium, at 21 percent.
"EU emissions haven't priced in any recovery in the euro
zone," Frederic Lasserre, head of commodities research at the
bank, told reporters today.
December 2010 EU allowances climbed as much as 1.3 percent
to 15.16 euros ($20.83) a metric ton and were at 15.11 euros as
of 9:30 a.m., according to data from ICE Futures Europe exchange
in London. U.K. gas for the six months through September 2011
rose 2.4 percent as freezing weather was forecast for London.
Carbon allowances are up 21 percent this year as utilities
buy to hedge their forward power sales and Brussels-based
regulators of the world's biggest greenhouse-gas market ration
supply of the permits.
"If you expect more industrial production and more
electricity generation, you should expect more emissions and
more buyers in the market," Lasserre said. "Some of the
European utilities sold their quotas when economic activity was
extremely low. As they get the quota for free, it's easy cash."
Utilities will buy in years to come, he said. "Since we
started at a very low level, the rally could be quite strong."

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: Mike Anderson, Randall Hackley.

To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or
Chanyaporn Chanjaroen in Singapore at +65-6499-2837 or

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