Oct. 16 (Bloomberg) -- European carbon allowances closed at their highest in five weeks after the regulator in Brussels said yesterday it would reveal details of its plan to fix a supply glut on Nov. 14 and as natural gas and power advanced.
European Union carbon for December jumped 4 percent to close at 8 euros ($10.44) a metric ton, the highest since Sept. 7, on the ICE Futures Europe exchange in London. German power for 2013 increased 0.5 percent and U.K. summer natural gas rebounded 0.9 percent.
The Climate Markets & Investment Association sought a 1.23 billion-ton reduction in supply of EU carbon in 2013 and 2014 combined, as the European Commission seeks to fix the glut through a policy known as backloading supply toward 2020.
There should be no new auctions of carbon allowances in 2013, apart from those sales to help finance new climate-protection technology that are delayed from 2012, the association said today in an e-mailed statement.
The CMIA recommended a supply control mechanism that would systematically remove from the market a number of surplus permits more than three years old by cutting the volume for sale. The mechanism would take out 1.6 billion tons in the four years through 2015, the association said.
“CMIA is particularly concerned by reports that the backloading proposal will be considered on a slower legislative timetable than was first indicated,” according to the statement. “Further prevarication and mismanagement of expectations risks compounding already low market confidence.”
United Nations Certified Emission Reductions for December advanced 6.2 percent to 1.55 euros a ton.
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