United Nations Certified Emission Reduction carbon credits posted their biggest weekly gain since Dec. 21 on speculation that factories are snapping up the contracts to comply with European Union carbon caps.
CERs for delivery in December rose 40 percent this week to close at 42 euro cents ($0.54) a metric ton on the ICE Futures Europe exchange in London. That’s the highest since April 16.
Some emitters are selling European Union allowances and buying cheaper CERs, said Mark Owen-Lloyd, trading director at Clean Energy Trading Ltd. in London. “Compliance buyers are still doing the swap, but the price is being moved up by speculators,” he said today by e-mail.
Factories, power stations and airlines in the EU carbon market can use a limited portion of cheaper UN credits to comply with the bloc’s emissions 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.
EU carbon permits for December closed 11 percent lower at 3.38 euros a ton on ICE, their biggest daily decline since April 17. They fell 11 percent this week, the most since the period ended April 19.
UN Emission Reduction Units for December increased 2 euro cents, or 18 percent, to close at 13 euro cents a ton on ICE. They’ve risen 30 percent this week.
CERs are created from carbon-reducing projects in developing countries under the UN’s Clean Development Mechanism. ERUs are from developed nation projects under the UN’s Joint Implementation mechanism.