European Union carbon permits rose to their highest in two weeks as policy makers consider a plan to combat a glut of allowances by limiting their supply.
EU carbon permits for December rose as much as 7.7 percent to 4.76 euros ($6.44) a ton on London’s ICE Futures Europe exchange and were at 4.73 euros at 11:58 a.m. in London. United Nations Certified Emission Reduction credits for December rose 2 cents to 36 cents a ton.
EU allowances have surged 65 percent from a record-low 2.81 euros a ton on Jan. 24 as politicians consider a European Commission proposal to temporarily reduce new permits by 900 million metric tons over the next three years, a process known as backloading. The supply glut may reach “well over” 1.5 billion tons by the end of 2013, Jos Delbeke, the commission’s director general for climate, said at a conference in Brussels today.
Talks about the measure will continue at least until Feb. 19, when the European Parliament’s Environment Committee is scheduled to vote on amending the carbon trading directive that governs the auction of new allowances.
Carbon prices aren’t driving companies out of Europe and into countries without emission curbs, Delbeke said.
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