LONDON: EU carbon prices ended above 7 euros for the third consecutive day on Friday as traders were reluctant to sell permits ahead of a procedural step towards regulators cutting supply.
The ICE December 2014 carbon contract was up 16 cents at 7.24 euros, just off the day's peak of 7.25 euros, the highest it has traded since December 2012.
The benchmark carbon contract posted a 7 percent weekly gain, marking the sixth consecutive weekly rise since Jan. 10. "There are just no major shorts in the market at the moment and without that balance the price keeps going up," said one trader.
Carbon has increased 55 percent over the period as news gradually emerged that lawmakers would not oppose the EU's so-called backloading plan, triggering a spate of buying.
The European Commission's proposed backloading plan will remove 900 million permits from auction schedules over the next three years in an effort to incentivise more investment in low carbon technologies.
An EU official on Friday confirmed that the adoption of a fast-track to start backloading is on the final agenda of a Feb. 24 ministerial meeting.
Carbon traders had been awaiting the confirmation as any further delay would cut the chance regulators can remove the maximum possible 400 million carbon permits this year.
Adoption on Monday paves the way for exchanges to change auction schedules in time to meet an end-March deadline to withdraw 400 million units, after which a maximum withdrawal of just 300 million units is possible.
Meanwhile, Belgium's Flanders government said by email on Friday it had notified all companies that made offers of its decision on the winners of a tender to buy as many as 20 million UN-backed carbon credits.
Firms including ALCO2, Belektron, Belfius, Mercuria, Merrill Lynch, Shell, Sindicatum, South Pole Carbon, Standard Bank, Statkraft, Vattenfall and Vitol submitted offers last September.
Flanders wants to buy the credits to help it meet internationally-binding emission targets under the UN's Kyoto Protocol and has been one of the few sources of demand in the vastly oversupplied UN market.
The government said it would publish the tender winners following a two week notification period. The ICE December 2014 Certified Emission Reduction (CER), the most liquid UN carbon contract, ended down 1 cent at 33 euro cents.
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