UN Carbon Discount Widens as Supplies Jump 9.2 Million Tons
2011-01-17 18:10:30.17 GMT
By Mathew Carr
Jan. 17 (Bloomberg) -- The discount of United Nations
emission credits compared with European Union permits widened on
speculation that regulators may supply a record number of offset
credits this week.
The supply of credits from the UN emissions program may be
a record 24 million metric tons this week, analysts including
Clemens Tummeltshammer at Bloomberg New Energy Finance in London
forecast. The UN supplied 9.2 million tons today, according to
data compiled by Bloomberg.
The discount, traded as a separate contract, widened 1 cent
to 3.46 euros ($4.60) a metric ton on the ICE Futures Europe
exchange, the most since Dec. 7.
UN regulators are boosting issuance of credits following
criticism by some lobby groups including the International
Emissions Trading Association that bottlenecks were curbing
investment in clean energy. UN credits can be used for
compliance in the EU program, the world's biggest greenhouse gas
market by traded volume.
UN Certified Emission Reduction credits for December rose 2
cents to 11.08 euros a ton. EU allowances for December increased
0.5 percent to 14.56 euros. Factories can swap some spare EU
allowances for cheaper UN credits to reduce the cost of
compliance. They must hand in allowances or credits by the end
of April to match verified emissions in 2010, according to the
EU program's rules.
"We expect to see more buyers coming in before the end of
the 2010 compliance period to take advantage of the spot swap
levels, which are currently around 2.90 euros," said Michael
Karavias, director of carbon markets at Evolution Markets Ltd.
At the start of January, spot CERs were trading as high as
47 cents over CERs for December 2011, Karavias said today by
phone and e-mail. "Coupled with the lack of compliance buyers
and large issued volumes, the price has tailed off to around 30
cents through the brokered markets," he said. The spread was 27
cents a ton today based on contracts on ICE and the BlueNext
exchange in Paris.
For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
--Editors: Mike Anderson, Randall Hackley.
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