The UK government yesterday completed its fourth auction of carbon credits as part of the EU emissions trading scheme, again raising over €50m for the Treasury.
The Debt Management Office confirmed that 4.2 million EU allowances (EUAs) were successfully sold with the clearing price for the auction set at €13.38.
Under the terms of the auction, competitive bids made at prices above the clearing price are allotted in full to the successful bidder, while all bids accepted at the clearing price were allotted approximately 88.6 per cent of the amount bid for.
All but a handful of the bids were competitive, meaning the government raised a minimum of €56.2m through the auction.
Stig Schjolset of analyst firm Point Carbon said the clearing price was largely in line with expectations. "The previous auctions closed at a price just below the spot price, and we saw that again yesterday," he said.
The price of EUAs hit a 30-day high of €14 earlier today as the market resisted the impact of this week's drop in oil prices.
Schjolset said the market was showing signs of stability after prices fell earlier in the year as a result of falling industrial output and reduced demand for EUAs from carbon-intensive industries.
"Prices fell as a result of the recession, but they have stabilised around the €13 mark for quite a long period now," he said. "Even though demand for EUAs to cover firms' carbon emissions is down, long-term expectations that prices will recover are propping up the market."
Price of EUAs hits nine-month low ahead of latest carbon allowance auction 07 Jan 2010
As government completes its latest auction of carbon credits, analyst warns recovery in prices could prove short-lived 04 Jun 2009Price of EU carbon allowances bounces back to more than €13 in trading today, after report confirms carbon price fell 21 per cent in 2009 04 Jan 2010
Research note says price of EUAs will rise 10 per cent during 2010 as industrial firms hedge bets ahead of phase three 08 Jan 2010
Experts predict €10 EUAs could represent good deal for long-term investors 09 Feb 2009
Resolution follows similar decision by Shell shareholders last month 09 Feb 2010
Measures needed to ensure cars do not charge from fossil fuel-powered grid 09 Feb 2010
Researchers use salicornia plants in carbon-negative process to grow biofuels 09 Feb 2010
More news
Friends of the Earth’s biofuels campaigner Kenneth Richter argues that biofuel targets are a distraction from tried-and-tested ways of reducing transport emissions 09 Feb 2010
Trewin Restorick wonders if the concept du jour of "nudging" behaviour change can help curb UK carbon emissions 08 Feb 2010
From feed in tariffs to vanishing top soil, we run down the top stories from the past week 08 Feb 2010 More in-depth
Post your comment
Send an email to the Business Green editor at feedback@businessgreen.com
