Barclays Sees 'Growing Expectation' for Delay on UN Credit Ban
2011-01-18 18:55:23.354 GMT
By Mathew Carr
Jan. 18 (Bloomberg) -- The European Union may delay a ban
on some United Nations emission credits linked to industrial
gases, according to an analyst at Barclays Plc.
The regulatory arm of the 27-nation EU is considering
restrictions on carbon projects that it says may create
"excessive" profits for investors and undermine the market's
integrity. The EU said Nov. 25 it wants to prohibit UN-sponsored
credits related to hydrofluorocarbon-23 and some nitrous oxide
credits starting Jan. 1, 2013.
The EU Climate Change Committee, with representatives from
member states, is voting this week and may delay the date of
implementation, said Trevor Sikorski, an analyst in London for
Barclays Capital. "I think there is a growing expectation that
the Climate Change Committee will ask for a change in the date
in order to pass the proposal," Sikorski said today by e-mail.
The premium of credits for March 2013 over those for
December 2012, traded as a separate contract, narrowed 74
percent today to 5 euro cents ($0.07) a metric ton on the ICE
Futures Europe exchange in London. That's the narrowest spread
since Dec. 13. The March 2013 contract was at a 5 cent discount
on that day.
More than 11,000 facilities in the EU system, the world's
largest cap-and-trade program, may use UN credits as a cheaper
way to comply with their pollution limits. Regulators around the
world are clamping down on HFC-23, whose warming potential is
11,700 times more powerful than carbon dioxide. Officials at the
UN carbon market in November called for a revision of its
EU Climate Chief Connie Hedegaard said the bloc's member
states are showing "broad support" for the proposed ban. "We're
not discussing whether to do this but when to do this," she told
a hearing in the European Parliament in Brussels on Jan. 12.
"There were no member states calling for action prior to Jan. 1,
2013. I'll be reluctant to urge member states to take unilateral
action prior to 2013 because it'll undermine investors'
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, Reed Landberg.
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