yest/UN Carbon Discount to EU Permits Narrows 12% to One-


UN Carbon Discount to EU Permits Narrows 12% to One-Month Low
2010-12-15 17:38:55.94 GMT

By Mathew Carr
Dec. 15 (Bloomberg) -- The discount of United Nations
emission credits to European Union allowances for 2010 narrowed
12 percent to a one-month low as traders sought cheaper permits
for compliance.
The spread, traded as a separate contract, shrank to 2.32
euros ($3.09) a metric ton, the smallest since Nov. 10 on ICE
Futures Europe in London as of 5:24 p.m. The volume traded of
December 2010 Certified Emission Reduction credits was steady at
2.1 million tons as the futures contract fell 5 cents to 11.91
euros a ton. The 20-day moving average is 1.8 million tons.
Both UN CERs and EU allowances can be used for compliance
with the European program, the world's biggest carbon market.
Factories can sell EU permits granted by governments for free
and swap them for cheaper CERs, generating a profit.
"I'd think it would be industrials swapping to generate
some cash," said Alessandro Vitelli, an analyst in London at
IDEAcarbon, which rates emission-reduction projects. Issuance to
industrial-gas projects and more clarity about the rules of
delivery via ICE published on Dec. 9 may also have boosted
interest in CER trading, Vitelli said.
EU allowances for December fell 0.8 percent to 14.34 euros
on ICE.

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--Editors: Rob Verdonck, Randall Hackley

To contact the reporter on this story:
Mathew Carr in London at +44-20-7073-3531 or

To contact the editor responsible for this story:
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