European Union carbon permits for December were stable after reaching a record low as nations in the bloc prepare to decide whether to support a plan by the regulator to temporarily withhold supply to help mend a glut.
The benchmark futures contract dropped as much as 1.9 percent to 5.61 euros ($7.36) a metric ton on London’s ICE Futures Europe exchange, the lowest since the contract first traded in April 2005, and was up 1 cent at 5.73 euros at 8:13 a.m.
Carbon dropped 26 percent in the past year as recession reduced demand and supply of United Nations offsets surged. The bloc has already started selling allowances for next year, with about 20 million tons a week of supply expected starting next month, at least until nations agree the glut plan, according to Bloomberg New Energy Finance.
Under the European Commission’s plan, 900 million tons of allowances would be removed from the market in the three years through 2015 and returned near the end of the decade.
The Brussels regulator on Nov. 30 called for nations in the bloc to reveal their positions on the proposal, which would reduce supply by the equivalent of almost a half a year’s full supply. Still, a Dec. 13 Climate Change Committee meeting of national representatives won’t ask countries to adopt a formal opinion or vote, the commission said.