EU Cancels Carbon Auction, Prices Drop
From Environmental Leader
The European Union canceled an auction of carbon permits for the first time, causing prices to drop to their second-lowest close on record.
The auction was canceled because bids failed to reach a secret reserve price, reported Bloomberg News. The price would have cleared “significantly” below the prevailing market rate, according to European Energy Exchange AG, Bloomberg reported.
The EU’s Emissions Trading Scheme, the largest global carbon market, has been plagued by the falling price of carbon permits for years. The ETS saw the estimated carbon price drop 49 percent €5.82 per metric ton in 2012, down from €11.45 per metric ton in 2011. In the past five years, carbon prices on the ETS have plummeted nearly 90 percent.
The EU’s ETS gives and sells carbon allowances to factories and power plants to cover their emissions. This year, some countries including Germany and Greece began selling more than 40 percent of their allowances in auctions instead of giving them away for free, reported Bloomberg.
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