Isra-Mart srl : New Zealand spot carbon price slips

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Isra-Mart srl news:

New Zealand carbon prices drifted lower over the previous week, pressured by a weaker exchange rate and faltering prices for U.N. carbon offsets.

Spot permits under New Zealand's emissions trading scheme were trading at NZ$20.15 ($16), brokers said, compared with the previous week's price of NZ$20.25.

Prices have held a NZ$20.10-NZ$20.25 range for the past month.

Reports released by Climate Change Minister Nick Smith on Friday showed the country's emissions fell in 2009 from the year before, with the country's position under the Kyoto protocol also improving, with the scheme credited for part of the improvement.

About 350,000 NZUs were traded over the week, according to brokers.

Each permit represents a tonne of greenhouse gas emissions. The scheme is designed to help curb output of emissions blamed for causing global warming.

"Moribund would be one word to describe the New Zealand carbon market this week," said Nigel Brunel, a broker with OM Financial, who added the market was split between trading spot units and short-dated forwards.

The March 2012 contract is currently valued at NZ$21 and the March 2013 contract at NZ$21.50, Brunel said.

The December 2011 CERs in the European market fell 2.7 per cent to ?12.76 over the week, while the NZ dollar firmed 0.7 per cent against the euro to 0.547.

Certified emissions reductions, or CERs, are U.N.-backed offsets from clean-energy projects in developing nations that can be imported into New Zealand and used in the domestic trading scheme.

In effect, CERs fell to NZ$23.80 in the domestic market, down from NZ$24.50 a week ago, but market participants said the U.N. credits are still too expensive for New Zealand emitters, who have the option to pay NZ$25 directly to the government for every second tonne of CO2 they emit.

The New Zealand market, the only national emissions trading scheme outside the European Union, was initially marred by a lack of supply.

But it has been ramping up since July 1 last year when the scheme was expanded to include energy producers, industry and the transport sector, which account for about half of the country's emissions.

Under transition measures, emitters such as power generators and refiners have the option of paying a fixed NZ$25 until January 2013 or buying from the market. Under the measures, emitters only have to surrender one permit for every two units of emissions.