Deferred Phase 3 Carbon Sales May Delay Price Fall, BNEF Says

Delays in selling about 30 million carbon permits that were scheduled to be sold this year could push back an anticipated decline in prices, according to Bloomberg New Energy Finance.

The Czech Republic, Poland, Ireland, Estonia and Belgium all failed to complete preparations in time to participate in auctions that run through Dec. 18, according to a schedule of sales published by the European Energy Exchange AG on Dec. 3. They may still not be ready to start selling when the third phase of the bloc’s carbon market begins next month, analysts including James Cooper at Bloomberg New Energy Finance in London said yesterday in an e-mailed report.

The delay in auctioning all of the permits earmarked for the so-called early Phase 3 sales means that the unsold portion will be added to regular auctions taking place from 2013. The European Union is considering a plan to withhold 900 million permits in the three years to 2015 to reduce a glut that helped push prices for December to a record low of 5.68 euros ($7.45) a ton yesterday.

“The volume from the five currently non-participating countries is also at risk for the start of full auctions,” Cooper said. “For example, the Czech Republic may not be ready until February.”

The 30 million tons of permits represents a little more than a week’s worth of auction supply in the third phase, Cooper said.

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