NZUs hit new record low of $4.92

Following announcement on Wednesday by the European Commission of a package of measures aimed at propping up prices in the EU ETS, prices of UN offsets fell to new lows, with spot green CERs closing at €2.90 and ERUs lagging these at €2.44; about NZ$4.46 and $3.75 respectively.

While clearly aimed at dragging up low carbon prices, the Commission's plan, which involves temporarily withholding supply of credits in the early years of Phase 3 of the EUETS (2013-2020), appears to have been received with some disappointment.

Carbon allowances had gained for 3 days straight prior to the announcement, however prices for European Union Allowances fell about 5% on publication of the proposal, which traders appeared to find short on detail. While the Commission provided scenarios around the temporary withholding of between 400m and 1.2 billion tonnes, no indication was given as to the favoured option.

For CERs and ERUs, which currently trade at about half the cost of EUAs and are the price-setting credits in our New Zealand market, the fall was more pronounced - about 10%. NZUs followed suit and settled back to new record lows.

Source: Carbon Match Weekly

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