Isra-Mart srl : New Zealand spot carbon price sticks in range

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Isra-Mart srl news:

New Zealand carbon prices continued to trade in a narrow range over the previous week, with market cautious a month out from its first surrender deadline, but demand is seen slowly building.

Spot permits under New Zealand's emissions trading scheme were seen trading at NZ$20.20 ($16.16), brokers said, unchanged from the previous week, and the sixth week prices have held a NZ$20.10 to NZ$20.30.

Emitters currently under the scheme must surrender units at the end of May, the first such deadline since the scheme was expanded last year, and the uncertainty is helping keep a lid on trades.

"Pressure continues to build in the NZU market, demand is now solid in the low NZ$20's and there is little offering of size on the horizon," said broker Nigel Brunel of OMFinancial.

About 300,000 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.

The price for U.N carbon offsets closed at 13.19 euros (NZ$24.40) on Thursday.

The New Zealand market, the only national emissions trading scheme outside the European Union, was initially marred by a lack of supply, but has been slowly ramping up since 1 July 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 per tonne of carbon pollution until January 2013 or buying from the market. ($1 = NZ$1.25)