European Carbon Rises to Three-Week High Before Vote on Glut FixMathew Carr
European Union carbon permits rose to their highest in almost three weeks as the environment committee of the bloc’s parliament prepared to vote on a measure to temporarily cut supply of the certificates.
EU allowances for December climbed 2.2 percent to 4.58 euros ($6.16) a metric ton, the highest close since Jan. 23, after earlier advancing to 4.72 euros on the ICE Futures Europe exchange in London. United Nations Certified Emission Reduction credits for December fell 2 cents, or 5.7 percent, to 33 euro cents a ton.
The European Parliament committee is set to vote Feb. 19 on a proposal designed to allow the bloc to postpone the sale of 900 million tons of allowances until the end of the decade in a process known as backloading. The price of the permits plunged 31 percent this year and reached a record 2.81 euros a ton last month as Europe’s sputtering economy curbed demand for the contracts.
Carbon advanced as traders anticipated support for the supply reduction at next week’s vote, Matthew Gray, an analyst in London at Jefferies Group Inc., said today in an e-mailed research note.
The entire parliament will vote on the measure later this year. The proposal must also clear the Climate Change Committee of national-government representatives, which is probably the most difficult test of support, Gray said.
Additional sales of 100 million tons of EU carbon from a so-called new-entrant reserve that was set aside to raise funds for clean-energy projects may erode any upside from mending the glut, he said.
Today’s price rise “will likely prove vacuous,” he said.