Carbon-dioxide allowances in the European Union emissions-trading system jumped as traders anticipate more buying next week and as the United Nations- overseen regulators crimp supply of some offsets.
EU carbon dioxide permits for December 2010 rose as much as 41 cents, or 2.7 percent, to 15.37 euros ($19.46) a metric ton on London’s European Climate Exchange, their highest since July 5. They were at 15.24 euros at 3:30 p.m. local time.
“Carbon looks set to break out of a downward channel,” Andrew Ager, the London-based head of carbon and emissions at Prudential Financial Inc.’s Bache Commodities Ltd., said in an e-mailed note. “With the return of utilities after the summer break and looming specter of renewed compliance buying, the risk is to the topside.”
Traded volumes of EU permits for December fell as low as 3,658 lots on the European climate Exchange on Aug. 16, the lowest level this year, as traders went away for holidays.
Prices rose after the European Energy Exchange published the clearing price for its sale of EU permits for the German government. Some 570,000 European Union carbon-dioxide emission allowances were sold for 15.16 euros a metric ton in an auction today, the European Energy Exchange said on its website.
Prices of certified emissions reduction credits, generated by developing countries, may rise this year as regulators review industrial gas projects and Chinese wind energy facilities, fueling speculation that supplies will slow.
“There are fears of a supply squeeze because of fears industrial gases will not be allowed to produce certified emission reduction credits,” said Henry Derwent, chief executive officer and president of the Geneva-based International Emissions Trading Association, in an interview before the Carbon Forum Asia conference.
United Nations emissions credits, or CERs, for December delivery rose 1.9 percent to 13.50 euros a metric ton on the European Climate Exchange.
German business confidence unexpectedly rose to a three- year high in August, suggesting the economy may not lose as much momentum as some economists forecast after expanding at a record pace in the second quarter. A speedy recovery to the German economy may spur higher permit demand as emissions grow from factories and businesses raising output.