EU Carbon Plunges After German Permit Auction Fails Second Time

  • Date: 22/02/13
  • Mathew Carr & Alessandro Vitelli, Bloomberg

European Union carbon permits dropped as much as 9.4 percent after a sale by Germany failed for a second time this year because bids didn’t reach an unspecified reference price.

EU allowances for December fell as much as 50 cents to 4.80 euros ($6.34) a metric ton on the ICE Futures Europe exchange in London and were at 5.08 euros at 11:10 a.m. The contracts closed at a one-month high of 5.30 euros yesterday.

The 4 million tons from the canceled sale will be “evenly distributed” over the next four weekly auctions, Leipzig, Germany-based European Energy Exchange AG, which handled the auction, said by e-mail.

EU carbon allowances for this year dropped to a record 2.81 euros a ton last month as the region’s slowing economy and a surplus of the certificates damped demand. The European Commission has proposed holding back 900 million tons of new permits over the next three years as one way to support prices.

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