California carbon soars 14 pct as new buyer enters-Point Carbon

April 20th, 20123:37 am @


By Thomson Reuters Point Carbon

SAN FRANCISCO, April 19 (Reuters) – California carbon
allowances (CCAs) for delivery in 2013 hit their highest price
this year, gaining $1.85/tonne from the previous week to close
at $15.50/t on Thursday, on the back of new buying, market
sources said.

A total of 245,000 CCAs changed hands this week on the
IntercontinentalExchange (ICE), making it the busiest week for
allowance trading so far this year.

Brokers said a new buyer in the market, which was described
as a firm with a small compliance obligation that was also
interested in speculating on the market, helped kick off
the trading on Monday.

Participants also staked out positions early in the week
ahead of the expected approval of carbon market rules for the
state’s three big investor-owned utilities by the California
Public Utilities Commission (PUC).

On Thursday the PUC approved a revised set of market rules
for the companies, which gave the “big three” the green light to
buy and sell allowances and offsets.

That vote kept the rally going on Thursday, sources said.

The PUC’s final regulations give the utilities more
flexibility to purchase compliance instruments than had been set
out in an earlier draft of the rules, which was released in

The rules allow Pacific Gas and Electric, Southern
California Edison and San Diego Gass and Electric to enter into
offset forward contracts with credit suppliers and to purchase
allowances directly from exchanges.

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