EU Carbon Rises at Fastest Weekly Pace for More Than a Year

  • Nuclear availablily in France dropped to 61 percent Friday
  • Profit from burning coal for power stays off September lows

European Union carbon allowances gained at the fastest weekly pace since February 2015, as crude oil climbed and amid speculation that French nuclear station outages will boost demand for fossil-fuel power.

French nuclear availability dropped to 61 percent on Friday, down from 64 percent on Thursday, according to data from French grid operator RTE. That compares with 71 percent at the same time last year.

Allowances also advanced because the profits made by coal-fired power held above the low levels of August and early September, said Ingo Ramming, the London-based co-head of commodity solutions for Commerzbank AG.

“Improved power spreads helped the market to recover from the lows,” he said Friday in an e-mailed reply to questions.

Allowances gained a third week as European Parliament lawmakers debated rules for the world’s biggest carbon market in the decade through 2030. Some want to change a European Commission plan to speed up emissions cuts and curb a permit surplus that has contributed to an 80 percent drop in carbon prices in the past eight years. Other politicians are seeking to protect industry from what some consider could be an excessive rise in pollution costs.

Benchmark December carbon futures fell 1.2% to settle at 4.96 euros ($5.57) a metric ton, up 9 percent week-on-week and 11 percent month-on-month. Aggregate trading volume rose 43 percent in September.

The German clean-dark spread, a measure of coal-power profitability, fell 9 percent Friday to 1.76 euros a megawatt hour. That’s still more than levels closer to 1 euros earlier this month.

Crude oil rose 6.8 percent week on week, the most since August 19, after OPEC agreed to its first production cut in eight years on Wednesday. Carbon can track oil, a commodity bellwether linked to about half the natural gas supply contracts in Europe.

Before it's here, it's on the Bloomberg Terminal.
LEARN MORE