Azernews.Az

By Bloomberg

United Nations carbon credits for December fell to a record as holders of the offsets seek to sell them before they expire in March.

Front-year Certified Emission Reductions dropped 20 percent to 0.04 euros ($0.05) a metric ton today on London’s ICE Futures Europe, the lowest since the contract began trading in 2008.

Prices for the credits that rich nations from Germany to Australia use to offset domestic emissions by investing in green projects elsewhere have lost more than 99 percent from a 2008 peak as slowing global growth cut demand. CERs for emission cuts before Dec. 31, 2012, can’t be used after March 31 in the EU’s emissions trading system nor by nations with climate targets under the 1997 Kyoto Protocol.

“We’re now seeing people realizing that it could go to zero,” Andy Ager, head of trading in Budapest at Vertis Environmental Finance, said today by e-mail. “They’re having to accept that it’s not just a possibility, but it’s becoming a reality.”

Factories and power stations in the EU may use CERs as well as Emission Reduction Units from other developed countries to cover 1.54 billion tons of greenhouse-gas emissions, according to Andrea du Rietz, an analyst at Bloomberg New Energy Finance in London. EU installations have used 1.2 billion CERs and ERUs from January 2008 through October.

CERs for delivery in 2015 declined 8 percent to 0.55 euros a ton on ICE Futures today, after advancing yesterday to their highest in more than a year. Prices for the year-ahead contract have risen since October as the UN supplied 75 million offsets eligible for the period after March, or 5.2 percent of total supply.