EU Sells Carbon Permits in Auction Above Prevailing Market Price

The European Union sold carbon permits in an auction for more than the prevailing market price for the first time in more than six weeks, according to data compiled by Bloomberg.

The bloc sold 3.5 million metric tons of permits at 6.18 euros ($8.06) a ton in an auction hosted by European Energy Exchange AG. Day-ahead futures for Phase 3 permits eligible through 2020 were bid at 6.12 euros and offered at 6.21 euros on London’s ICE Futures Europe exchange at 10 a.m. in London, when the sale ended.

It’s the first time the auction price has been more than the prompt cost since Nov. 23. The differential between the two may be considered by traders as a signal of market demand.

There were bids for a total of 9.2 million tons in the auction, 2.6 times the number of permits for sale, according to data on the EEX website. That so-called cover ratio is above the most recent sales carried out in December, and below the average 2.8 ratio for all sales of Phase 3 permits.

To contact the reporter on this story: Alessandro Vitelli in London at avitelli1@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net

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