Europe to leave collapsing carbon prices to market
The European Commission will not intervene to support the market for European carbon emissions where futures prices have nosedived along with the economic downturn, the EC's chief climate change negotiator said on Friday.
Artur Runge-Metzger was speaking in Tokyo after attending an informal dialogue on climate change.
"What we observe at the present in the carbon market is a sliding price for the tonnes of allowances that are in the market," he told reporters.
"We think this follows the economic recession - there is much less demand."
Benchmark EU allowances closed at 8.25 euros ($10.63) a tonne on Thursday, after falling by more than 70 percent since July last year. EUAs were trading around 8.35 euros in early Friday trade.
"If you look at the legislation, there is no way the Commission can intervene in the market to support prices or set any kind of floor price," Runge-Metzger added. "That is something we leave to market forces, otherwise we will not have a market."
Analysts are predicting EUAs will fall further, taking prices for U.N. offsets called CERs with them.