United Nations Certified Emission Reduction credits will more than double to 2.50 euros ($3.20) a metric ton next year after a European Union ban is enforced, said Orbeo, which manages projects that create the credits.
The “EU-ETS bans act as regulatory cliffs, forcing supply earlier in the market and distorting prices,” Carine Hemery, an analyst at Orbeo in Paris, said in an e-mailed note.
CERs for December rose 4.8 percent today to 1.10 euros a ton on the ICE Futures Europe exchange in London. They dropped to a record 71 cents a ton on Oct. 25 on muted demand and surging supply. The EU has banned some industrial-gas credits starting in May next year and has proposed banning some Emission Reduction Units issued after this year.
“With the vote for the Emission Reduction Unit ban scheduled just two weeks before Phase 3 starts, turmoil is likely in the CER/ERU market until year-end,” Hemery said. That phase begins Jan. 1 and runs through 2020. Orbeo is a unit of Solvay SA, the Brussels-based chemical company.