United Nations Certified Emission Reduction credits had their biggest one-day gain since Dec. 20, 2011 amid speculation factories and utilities are using the carbon offsets to meet European Union pollution targets.
CERs for December rose 18 percent to close at 40 euro cents ($0.52) a metric ton on the ICE Futures Europe exchange in London. The contract has jumped 33 percent since May 3 and is heading for its biggest-ever weekly increase.
Factories, power stations and airlines in the EU carbon market use a limited portion of cheaper UN credits to comply with the bloc’s cap. Polluters can still claim about 300 million tons of CER offsets through the end of the decade, according to Trevor Sikorski, the head of natural gas, carbon and coal at Energy Aspects Ltd. in London.
“At prices next to nothing, emitters should use up their allowance to use offsets,” Sikorski said today in a phone interview. “It feels like it’s bouncing around between nothing and nothing” and prices may stay at 25 cents to 50 cents “for a very long time.”
Greenhouse-gas producers covered by the EU’s emissions trading system surrendered 501 million UN offsets to cover discharges in 2012, about 18 percent fewer than expected, according to the median of a poll of analysts on May 2. The EU has set a limit of about 1.7 billion tons of offsets that emitters can use in the 13 years through 2020, Bloomberg New Energy Finance Ltd. data show.
Emission Reduction Units for December rose 1 cent to close at 11 euro cents on ICE. They’ve risen 10 percent this week.
EU carbon for December jumped 8.6 percent to close at 3.79 euros a ton on ICE, the biggest gain since May 3.