Fwd: EU Carbon Set for Second Weekly Loss as Power, Natural Gas Fall

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EU Carbon Set for Second Weekly Loss as Power, Natural Gas Fall
2010-12-10 09:50:16.546 GMT

By Ewa Krukowska
Dec. 10 (Bloomberg) -- European Union carbon-dioxide
allowances were poised for a second weekly loss as natural gas
and German electricity dropped, weakening investors' demand for
emission permits.
EU allowances for December 2011 lost as much as 1.1 percent
to 14.68 euros a metric ton, the lowest level since Nov. 10, and
were at 14.38 euros as of 9:20 a.m. on London's ICE Futures
Europe exchange. The contract lost 2.1 percent this week and was
7 percent weaker than six months ago.
U.K. natural gas for delivery next month dropped 0.6
percent to 59.05 pence a therm as demand for the fuel decreased.
Lower gas prices may prompt some power generators to switch to
the fuel, which requires about half as many carbon permits to
burn as coal.
German baseload power for next year, a European benchmark,
declined 1.1 percent to 49.85 euros a megawatt-hour, according
to broker prices on Bloomberg. Carbon permits are linked to
power prices because utilities often buy emissions allowances
when they sell electricity forward.
United Nations carbon offsets for delivery this month fell
0.6 percent to 11.35 euros on the last day of global climate
talks in Cancun, Mexico. They lost 2.2 percent this week,
dropping to the lowest price since April 1 amid a stall in
negotiations over a framework after 2012 to cut emissions.
UN Certified Emission Reductions can be used by emitters in
the EU cap-and-trade program, the world's largest, as a cheaper
alternative for compliance with their pollution limits.

For Related News and Information:
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--Editors: Mike Anderson, Alex Devine.

To contact the reporter on this story:
Ewa Krukowska in Brussels at +32-2-237-4331 or

To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or