EU carbon prices take high and low roads

Phase-one allowance price drops below €7 as phase-two price climbs to new heights

The price of carbon permits for the first phase of the European emission trading scheme (ETS) fell to a new low of €6.88 on Tuesday. Meanwhile the price of allowances for the scheme’s second phase, due to begin in 2008, has continued to rise after the European commission last week launched a crackdown on allocations planned by governments (EED 29/11/06).

Market experts said an estimated surplus of 100m phase-one allowances was driving prices down: "In any market where there’s theoretical oversupply, the price should be low and that’s really what we’ve seen finally hit in the last month," Tim Atkinson of emission brokers Natsource told ENDS.

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