Dec. 3 (Bloomberg) -- European Union carbon permits dropped to a record as rising supplies will outpace demand.
Allowances for December dropped 4 percent to close at 5.95 euros ($7.77) a metric ton on the ICE Futures Europe exchange in London. They dropped as low as 5.92 euros in intraday trading, 3 cents more than the record 5.89 euros on Nov. 30.
UniCredit SpA cut its forecast for permits to an average 5 euros a ton in 2013, predicting a draft measure to delay sales of some allowances is unlikely to be implemented next year.
The permits have fallen 23 percent in the past year as the bloc considers proposals to curb a glut in the world’s biggest greenhouse gas market.
The high volume of permits to be sold at auctions next year will depress prices, Kathrin Goretzki, a commodity analyst at the bank, said in a research note published today.
“We expect prices for EU allowances to fall further in 2013, trading in the range of 3.50 euros to 6.50 euros a metric ton,” she said.
A decision by European governments on the measure to postpone sales of 900 million allowances can take place as early as March, after the European Parliament rules on an amendment to the bloc’s emissions trading law in a plenary vote, according to two EU officials, who declined to be identified, citing policy.
To contact the editor responsible for this story: Lars Paulsson at email@example.com