Isra-Mart srl: New Zealand spot carbon price falls to 15-week low

www.isra-mart.com

New Zealand carbon prices fell to a 15-week low over the previous week on poor demand and lower prices for international carbon units.

Spot permits under New Zealand's emissions trading scheme were seen trading at NZ$19.75 ($16.3), brokers said, compared with the previous week's price of NZ$19.85.

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

About 100,000 NZUs were traded over the week, according to brokers, the lowest level since January.

"There appears to be a Mexican stand off between buyers and sellers," analysts at Westpac said in a note to clients, saying unit holders were reluctant to sell for less than the psychological NZ$20 level.

There is now almost a year until the next date when liable emitters will have to surrender their units, so buyers are content to sit back and watch where prices head, Westpac said.

Forward contracts for delivery in March 2012 were estimated at between NZ$20.30 to NZ$20.40.

The price for U.N carbon offsets closed at 12.56 euros (NZ$22.09) on Thursday.

The New Zealand market, the only national emissions trading scheme outside the European Union, was ramped up in July 2010 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$1.21) (EUR1=NZ$1.76)