Isramart : EU Carbon Dioxide Permits Fall After German Sale Boosts Supply

Isramart news:
European Union carbon-dioxide permits declined after the German government sold allowances in an auction, boosting supply.

EU permits for spot delivery fell 2.5 percent to 12.51 euros ($18.01) a metric ton on the BlueNext exchange in Paris as of 6:33 p.m. local time.

Germany sold 300,000 spot allowances at an average 12.67 euros a ton in today’s auction, the European Energy Exchange AG in Leipzig said today on its Web site.

Nations in the EU emissions-trading program, the world’s largest, are seeking to sell more permits rather than granting them for free. Germany plans to sell 570,000 futures contracts tomorrow via the EEX. The U.K. plans to auction 4.9 million allowances on Jan. 7.

These sales “could push prices down by the end of the week,” Emmanuel Fages, a Paris-based analyst at Orbeo, said yesterday in an e-mailed report. Factories with spare allowances because of the economic recession may also start to sell the permits as early as today, he said.

Volumes on BlueNext fell to 1 million tons today from 2.3 million yesterday, the highest since Dec. 8, according to data from the exchange.

Germany, the biggest emitter of CO2 in the EU, plans to auction about 40 million permits in 2010 and again in 2011, or almost 10 percent of the nation’s annual cap under the bloc’s carbon-trading system. Selling allowances rather than giving them away for free boosts companies’ incentive to cut emissions.