Signs that the carbon party is over

Signs that the carbon party is over

New Zealand carbon prices are at their highest level since July 2012 as emitters start to realise that the cheap international credit party is over, the country’s only carbon specialist is reporting.

Carbon News says that spot NZUs – the basis of the New Zealand Emissions Trading Scheme – have been trading above $6 since last December, while international units like ERUs are below $3.

“Emitters have come back into the market and started buying up domestic units as the death-knell sounds for cheap international credits,” says managing editor Adelia Hallett

Because New Zealand has not signed up to the second commitment period of the Kyoto Protocol, Kyoto credits such as ERUs and CERs – which have been driving domestic prices since the scheme started in 2008 – cannot be used to offset emissions from this year onward, Ms Hallett says.

That effectively means they cannot be used in New Zealand after May 31, the date by which emitters must surrender units to cover last year’s emissions.

Last year, more than 45.8 million units were surrendered to cover emissions in 2013. Just 0.5 per cent (227,000) of these were NZUs.
“Carbon market watchers have been warning emitters for some time that prices for NZUs would rise once the supply of international units dried up,” Ms Hallett says.

For further information visit www.carbonnews.co.nz

ENDS

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