Nov. 26 (Bloomberg) -- European Union carbon permits declined as nations may seek next month to block or abstain from voting on a plan to temporarily fix a glut in the market.
Abstention by Germany on a Dec. 12 vote seeking to delay the sale of 900 million metric tons of European Union carbon permits starting in 2013 may prevent the measure succeeding, according to Bloomberg New Energy Finance.
Nations may delay the vote if they are not ready, Konrad Hanschmidt, an analyst for the London-based research group, said today in an e-mailed note. A less probable scenario is that the vote would proceed and potentially fail because the proposal would get about 234 of 255 votes needed because of Germany’s abstention, Hanschmidt said.
The bloc is seeking to fix the glut, which may reach 2 billion tons during the next few years, according to a draft EU document obtained by Bloomberg News in October. That’s about the same as a year’s total supply in the world’s biggest carbon market by traded volume.
EU permits for December dropped as much as 1.6 percent to 6.90 euros ($8.95) a metric ton on the ICE Futures Europe exchange in London, and were at 6.91 euros at ton at 1:12 p.m.
Six EU member states may oppose the European Commission’s proposal to withhold supply, Hanschmidt said.
“We expect Poland, Romania, the Czech Republic, Hungary, Bulgaria and Slovakia to say ‘no’ to backloading,” as the plan is known, he said.
United Nations Certified Emission Reduction credits for December fell 3.7 percent to 78 euro cents a ton on ICE.
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