EIB May Have Already Started NER-300 Carbon Sales, Orbeo Says

The European Investment Bank may have already started sales of the first 2013 carbon permits, boosting supply as prices trade near record-low levels, said an analyst at Orbeo.

“The EIB could have started already, I wouldn’t be surprised,” said Emmanuel Fages, an analyst in Paris at Orbeo, an emissions trading venture. “This is the only window to achieve their mandate.” He said he had no direct knowledge that sales had started. Solvay SA (SOLB) is buying the 50 percent of Orbeo it doesn’t already own from Societe Generale SA.

The European Union’s regulatory arm last week said it has transferred carbon permits from a 2.3 billion-euro ($3.1 billion) reserve to the EIB, saying that sales of the allowances may last until the end of 2013.

The 27-nation EU decided in 2008 to use proceeds from the sale of 300 million post-2012 permits from the reserve for new entrants to the bloc’s cap-and-trade program to encourage renewable energy and carbon capture technologies. The first tranche of 200 million permits has to be sold by Oct. 2, 2012, and the remaining allowances may be sold later than the originally planned end-2012 deadline, according to the EU.

December 2013 volumes jumped to 16 percent of the market on the ICE Futures Europe exchange in London this week from 9 percent last week, said Matthew Cowie, an analyst in London for Bloomberg New Energy Finance. The 2013 premium over 2012 has narrowed this week, he said.

‘Not Violent’

Those two changes in combination with the EIB’s need to start selling within a month of the transfer of allowances from the commission, “could indicate that they’ve started selling,” Cowie said today by phone. “If the NER300 sale has indeed started and the market has not reacted violently then peoples’ fears that the world would end may prove unfounded.”

Given the deadline of starting sales by early January, the EIB is “not going to want to start the week before Christmas,” Cowie said. “In fact, it’s likely that the euro summit today is a bigger concern for traders than the arrival of this volume at the moment.”

EU December allowances dropped 0.9 percent to 7.57 euros a ton as of 12:51 p.m. in London on ICE, the biggest exchange for carbon trading. They earlier today rose as much as 1.4 percent. They reached a record intraday low of 6.77 euros on Dec. 6.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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