EU CARBON MARKET HAS BIGGEST DROP SINCE MAY
Bloomberg News reported that European Union (EU) carbon permits had their biggest weekly drop in almost two months amid concern weak economies will discourage efforts to reduce a glut of the contracts in the world’s biggest greenhouse-gas market. Allowances for December fell as much as 3.7% last Friday to 5.48 euros ($6.85) a metric ton, the lowest since July 7, on the ICE Futures Europe exchange in London. Permits traded at 5.66 euros at 4:47 p.m., taking the weekly drop to 4.6%, the largest since August 8. The next round of talks between EU states on a proposal for a permanent permit reserve will take place October 20, according to two EU diplomats. Companies including Luxembourg-based ArcelorMittal, the biggest maker of steel, say higher carbon prices might spur investment outside Europe. A private gauge of euro-area services and manufacturing fell to the lowest in almost a year, data showed. “The state of the economy isn’t a good signal for an early introduction of the market stability reserve,” according to Olav Botnen, a senior power analyst at Arendal, Norway-based Markedskraft ASA. There’s a chance lawmakers will fail to carry out the plan, “and that’s a bearish signal,” he said. The reserve is intended to help mop up a record glut of carbon contracts. The EU favors starting it in 2021, while Germany, the bloc’s biggest economy, is leading efforts to advance the date to 2018. For the full story, see http://www.bloomberg.com/news/2014-10-03/eu-carbon-has-biggest-drop-since-may-as-economy-hurts-fix.html.