EUA price floor reaches ?15 a tonne

News Article - 04 November 2008
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The short to medium-term price floor of EU Allowances (EUAs) in the European emissions trading scheme (ETS) has dropped to €15 (£12) a tonne, according to a new report.

Research company IDEAcarbon said in its weekly accounting for carbon report that a reduction in oil prices and a lessening in heavy industry production were to blame.

In addition, the economic downturn was seen to be having an effect on the EU ETS, with industrial companies needing short-term money selling off surplus EUAs.

The cost of EUAs has now dropped to a low of €17.40 on October 28th, after a peak of €29.33 on July 1st.

"Our latest forecasts suggest EU industrial output will grow at just one per cent in 2008, and shrink by 0.7 per cent in 2009," said IDEAcarbon director of strategy intelligence, Alessandro Vitelli.

He said this will lead to a reduced level of carbon emissions measurement in Europe "and therefore cause a drop in the shortfall of credits available".

In the long term, however, Mr Vitelli believed the market was strong, with people realising a higher carbon price will be required to meet the EU's 2020 carbon emissions measurement target.

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