European Union carbon permits rose to their highest in almost three weeks as recent auctions for the certificates settled at above-market prices before next week’s vote on the bloc’s emissions trading law.
December EU allowance futures advanced as much as 6.1 percent to 4.86 euros ($6.56) a metric ton on London’s ICE Futures Europe exchange. That’s the highest price since Jan. 24. They were at 4.84 euros at 12:40 p.m.
The U.K. sold 4.1 million permits at 4.57 euros a ton at auction on ICE Futures, 2 euro cents higher than the midpoint of bids and offers for spot Phase 3 permits at 10 a.m., when the sale ended, ICE data show. Five of the last six auctions have cleared at prices above the prevailing spot rate, according to data compiled by Bloomberg.
Front-year futures prices have risen in four of the last five sessions, which may reflect demand before next week’s European Parliament environment committee vote on a plan to delay sales of carbon permits to boost prices, according to Milan Hudak, an analyst at Virtuse Energy s.r.o. in Prague.
“Traders may be accumulating permits in the expectation that the committee will approve the plan, which would be bullish for carbon,” Hudak said today by e-mail.
The EU rescue proposal for the carbon market is likely to win support from the environment committee, Matthias Groote, the lawmaker in charge of the measure in the assembly, said in an interview last week.
The plan also needs approval by the whole parliament and member states in the next stages of the legislative process.
United Nations Certified Emission Reductions for December gained 1 euro cent to 34 cents a ton.