UN Carbon Has Biggest Jump Since 2011 as EU Factories Tap Quota

May 11th, 20133:42 am @

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United Nations Certified Emission
Reduction credits had their biggest one-day gain since Dec. 20,
2011 amid speculation factories and utilities are using the
carbon offsets to meet European Union pollution targets.

CERs for December rose 18 percent to close at 40 euro cents
($0.52) a metric ton on the ICE Futures Europe exchange in
London. The contract has jumped 33 percent since May 3 and is
heading for its biggest-ever weekly increase.

Factories, power stations and airlines in the EU carbon
market use a limited portion of cheaper UN credits to comply
with the bloc’s cap. Polluters can still claim about 300 million
tons of CER offsets through the end of the decade, according to
Trevor Sikorski, the head of natural gas, carbon and coal at
Energy Aspects Ltd. in London.

“At prices next to nothing, emitters should use up their
allowance to use offsets,” Sikorski said today in a phone
interview. “It feels like it’s bouncing around between nothing
and nothing” and prices may stay at 25 cents to 50 cents “for
a very long time.”

Greenhouse-gas producers covered by the EU’s emissions
trading system surrendered 501 million UN offsets to cover
discharges in 2012, about 18 percent fewer than expected,
according to the median of a poll of analysts on May 2. The EU
has set a limit of about 1.7 billion tons of offsets that
emitters can use in the 13 years through 2020, Bloomberg New
Energy Finance Ltd. data show.

Emission Reduction Units for December rose 1 cent to close
at 11 euro cents on ICE. They’ve risen 10 percent this week.

EU carbon for December jumped 8.6 percent to close at 3.79
euros a ton on ICE, the biggest gain since May 3.

To contact the reporters on this story:
Mathew Carr in London at
m.carr@bloomberg.net;
Alessandro Vitelli in London at
avitelli1@bloomberg.net

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

Article source: http://www.businessweek.com/news/2013-05-09/un-carbon-credits-increase-as-european-emitters-tap-offset-quota