Bloomberg News

EU Carbon Falls to Lowest in a Month on Potential Supply Boost

September 17, 2012

European Union carbon permits dropped to their lowest in more than a month after the regulator said it would finish an upgrade of the market’s registry system by Oct. 2, allowing a supply boost.

EU allowances for December decreased as much as 2.6 percent to 7.26 euros ($9.54) a metric ton on the ICE Futures Europe exchange in London, the lowest since Aug. 13, and were at 7.29 euros at 4:20 p.m. United Nations Certified Emission Reduction credits for December dropped as much as 14 percent to a record 1.45 euros.

The upgraded registry will allow the start of a 1.1 billion euro program of sales for the next phase of the world’s biggest greenhouse gas market by traded volume, the commission said today on its website. The period, known as Phase 3, runs from 2013 to 2020.

“Today’s announcement of the single registry timetable could trigger selling” with prices declining as low as 6.80 euros a ton this week, Konrad Hanschmidt, an analyst in London for Bloomberg New Energy Finance, said today in an e-mailed note sent before the commission published its statement. Prices may rise as high as 8 euros this week as the regulator separately considers a temporary supply withdrawal, he said.

The upgraded registry will open at 8 a.m. Brussels time on Oct. 2, the commission said. Operations of the current registry will be suspended starting Sept. 27, allowing for the improved software, the regulator said.

The upgraded registry will include so-called trusted accounts that allow faster trading, the commission said.

To contact the reporter on this story: Mathew Carr in London at m.carr@bloomberg.net

To contact the editor responsible for this story: Lars Paulsson at lpaulsson@bloomberg.net


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