EU Carbon Erases Gains Before Lawmakers’ Glut Fix Vote TomorrowAlessandro Vitelli
European Union carbon permits for December erased earlier gains as traders prepared for tomorrow’s European Parliament committee vote on measures to boost the price of allowances.
EU permit futures for December dropped 1.4 percent to 5.12 euros ($6.83) a metric ton on London’s ICE Futures Europe exchange. That’s the biggest decline in a week. The contracts earlier advanced as much as 6.4 percent to 5.52 euros.
“It seems people do not want to hold positions ahead of tomorrow’s vote,” Milan Hudak, an analyst at Virtuse Energy s.r.o. in Prague, said today by e-mail.
The parliament’s environment committee will vote on an amendment to the bloc’s emissions-trading law that would make explicit the right of the European Commission to delay the sale of 900 million permits from 2013 through 2015 until 2019 through 2020. The decision is due after 9 a.m. in Brussels.
A vote in favor of the commission’s plan may boost prices as high as 6 euros a ton in the short term, according to Paolo Coghe, an analyst at Societe Generale SA in Paris.
“Stabilization above 5.55 euros to 6 euros a ton is the first key sign to look for” after the vote becomes public, Coghe said today in an e-mailed research note. “More buying strength would be needed to confirm a more prolonged recovery to 7.70 euros a ton or even to the channel resistance at 8.45 euros to 8.60 euros a ton.”
Certified Emission Reductions for December were unchanged at 32 euro cents a ton.