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Widening CO2 Spreads Will Tempt Buyers, Deutsche Bank Says
2010-11-12 17:40:34.546 GMT
By Mathew Carr
Nov. 12 (Bloomberg) -- The widening discount of United
Nations emission credits compared with European Union carbon
permits will probably tempt factories to buy the UN offsets and
sell spare permits, a Deutsche Bank AG analyst said today.
The discount of 2011 UN Certified Emission Reduction
credits to EU allowances, traded as a separate contract, widened
13 percent to 3.40 euros ($4.66) a metric ton, the biggest
spread since June 8 on London's ICE Futures Europe exchange. The
2010 discount widened 8.9 percent to 2.69 euros, the highest
level since June 15.
"That's a big enough spread to tempt industrials into the
market to buy CERs," said Mark Lewis, an analyst in Paris for
Deutsche Bank. "The spreads are becoming more volatile," Lewis
said today by phone.
The discount widened after the United Nations handed out
credits today to a hydrofluorocarbons-23 reduction project in
India, according to the UN's website, the first issuance for
such a project since June 2. Projects are given credits unless
at least three of the 10-member Clean Development Mechanism
Executive Board ask for a review.
"The fact that the issuance took place indicates that the
total three requests for review, required to trigger a request
for review, were not received," said David Abbass, a spokesman
in Bonn for the UN program.
"Requests for issuance have been received from four other
HFC-23 projects and have been published on the CDM website,"
Abbass said today by e-mail. "These, as well, will be handled
on a case-by-case basis."
EU allowances for December advanced 0.3 percent to 14.89
euros a ton. The UN's CERs for December fell 1.1 percent to
12.22 euros.
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, Raj Rajendran
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 on +44-20-7073-3520 or sev@bloomberg.net
