Jan. 29 (Bloomberg) -- European Union carbon permits dropped to a record as the bloc’s lawmakers considered whether to support the regulator’s plan to temporarily withhold supply through 2015 to fix a supply glut.
Carbon permits for December declined 4.6 percent to close at 3.99 euros ($5.38) a metric ton, according to data from the ICE Futures Europe exchange in London. Certified Emission Reduction credits for December fell 1 cent to close at 36 euro cents a ton.
Finland today backed the European Commission’s rescue plan for the market as Denmark said the situation was unsustainable, highlighting the need for governments to tackle the record surplus of allowances. The U.K. last week set conditions for supporting the measure and some nations don’t have a formal stance on the plan yet. EU Climate Commissioner Connie Hedegaard said Jan. 24 the alternative to the single market was as many as 27 different systems and taxes.
“It is clear that any alternatives to a community-wide market, like a return to the patchwork of national policies foreshadowed by Hedegaard if backloading fails or the U.K.’s possible exit from the EU, are highly improbable,” Daniel Rossetto, managing director of Climate Mundial Ltd. in London, which advises in emission markets, said today by e-mail. “A viable solution for reforming the EU emissions trading system and dealing with the EU allowance glut has yet to emerge, but is surely on its way.”
--With assistance from Peter Levring in Copenhagen. Editors: Alessandro Vitelli, Rob Verdonck