UN Emission Reduction Units Fall to Record on EU Vote Wagers

United Nations Emission Reduction Units erased losses after falling to a record on speculation that the European Commission may vote to ban the carbon credits at a meeting of national climate experts tomorrow.

ERUs for December fell as much as 40 percent before closing unchanged. The European Union’s regulator postponed its vote on a revision of the bloc’s carbon registry rules from the next meeting of the Climate Change Committee, according to two people with knowledge of the matter. The Commission confirmed the delay in a statement published after the close of trading.

ERUs for December fell as low as 15 euro cents ($0.20) a metric ton on London’s ICE Futures Europe exchange, its biggest-ever fall and the lowest price for any carbon credit or permit since the second phase of the market started in 2008. The contract later closed at 25 cents.

The EU was seeking to limit the use of some imported emission credits to help trim an oversupply in the bloc’s market that has grown to nearly 1 billion tons, according to Jos Delbeke, the EU’s director general for climate. The influx of carbon credits has boosted an existing surplus of EU permits and helped cut prices, he said on Oct. 2.

European Union carbon permits fell for a second day after the bloc said it will sell 819 million metric tons of allowances in 2013 and Germany’s economy minister reiterated objections to a stopgap measure to support prices.

The benchmark permit contract fell as much as 2.6 percent to 6.66 euros a ton on London’s ICE Futures Europe exchange, and closed at 6.75 euros. United Nations offsets for December dropped as much as 33 percent to 31 euro cents, the lowest since the contract first traded in 2008, before closing at 43 cents. They’ve lost 36 percent since the start of this month.

Auction Schedules

The bloc’s regulator said yesterday 20 member states will hold auctions three times a week next year to sell 383 million tons of permits. Germany will sell 183 million allowances in weekly sales, and the U.K. will offer 95 million permits in fortnightly auctions, according to a statement posted on the EU website. Five more countries will join the sales when they have completed preparations.

German Economy Minister Philipp Roesler sent a letter to Environment Minister Peter Altmaier rejecting his call for a reform of the EU’s emissions trading system, Handelsblatt reported, citing the letter. Altmaier had earlier written to Roesler urging him to join in backing the EU’s planned reform.

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