Feb. 8 (Bloomberg) -- European Union carbon permits had their biggest two-week gain since August, as policy makers weigh intervening in the market and natural gas and power contracts advanced.
EU allowances for December rose 8.3 percent to 4.55 euros ($6.08) a metric ton, taking the two-week increase to 11 percent, according to data from ICE Futures Europe in London. United Nations Certified Emission Reduction credits for December 2017 rose 1.5 percent today to 67 euro cents, their highest since Jan. 15.
The EU rescue plan to temporarily limit supply of allowances in the carbon market is increasingly likely to win majority support from the European Parliament’s environment committee, Matthias Groote, chairman of the European Parliament’s environment committee, said yesterday. The EU draft strategy to support the carbon market has divided governments, industry organizations and members of the Parliament.
German power for 2014 rose 1.4 percent to 42.30 euros a megawatt-hour, according to broker prices compiled by Bloomberg. U.K. gas for the six months through September advanced 0.3 percent on ICE, extending the contract’s gain since June 22 to 14 percent.
Carbon sometimes tracks natural gas prices as rising costs boost the appeal of other fuels such as dirtier coal, which requires twice the amount of emission allowances to burn than gas. Higher power prices also increase the incentive for utilities to sell forward and hedge by buying fuel and carbon contracts.
--With assistance from Ewa Krukowska in Brussels. Editors: Andrew Reierson, Rob Verdonck