Bloomberg News

EU May Delay Sale of as Many as 31 Million Carbon Permits

November 21, 2012

The European Union may delay the sale of as many as 31 million carbon permits for 2013 to next year if eight nations fail to complete paperwork before Dec. 4, according to Bloomberg New Energy Finance.

Only 12 of 25 member states have joined auctions hosted by the European Energy Exchange AG early enough to sell their full shares of 120 million so-called early Phase 3 allowances before the end of the year, according to data compiled by Bloomberg New Energy Finance. Phase 3 runs from 2013 through 2020.

The European Union will sell allowances representing more than half of the total cap on discharges in the bloc in the third phase of its carbon market. Countries must spread early auction volumes evenly. Late starters will have to sell their quota in sales that may run through April, according to James Cooper, an analyst in London at Bloomberg New Energy Finance.

The first 12 countries will sell their entire portion of allowances totaling 48.3 million metric tons of permits by the final auction scheduled for Dec. 18, Cooper said.

They will be joined by four more countries from Nov. 27, and by Greece from Dec. 4, according to a calendar of auctions on the EEX website. These nations will only sell a portion of their total quota in the remaining sales, according to Cooper.

“If the eight remaining countries begin auctioning from Dec. 11, 21.3 million tons will fall into 2013,” Cooper said in an e-mailed response to questions. “If the remaining countries are not included in the Dec. 3 calendar release, 31 million tons will spill into 2013.”

The EU’s original intention was to sell the early volumes before the end of 2012, before it began carrying out regular sales of allowances in 2013. The U.K. will auction its full allocation of 12.3 million tons in two lots on the ICE Futures Europe exchange, the first of which took place today. Germany is selling its full quota of 23.5 million tons in eight tranches on the EEX bourse.

EU permits for December 2013 rose 0.7 percent to 7.07 euros ($9.06) a ton at 4:31 p.m. London time on ICE Futures Europe.

To contact the reporter on this story: Alessandro Vitelli in London at avitelli1@bloomberg.net

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


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