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UK set for first carbon auction in over a year

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Stock photo: PA

Stock photo: PA

Stock photo: PA

The British government may raise about €150m in its first auction of carbon emissions allowances in more than a year, potentially depressing prices further.

The sale will be carefully watched by traders looking for signs of how many more allowances the EU's Emission Trading System can absorb.

Carbon has taken a hit along with natural gas and coal as warmer winter temperatures and the coronavirus reined in energy demand.

"Demand is still looking soft, with both power sector and industrial emissions likely to fall," said Trevor Sikorski, a carbon and gas analyst at Energy Aspects in London.

UK companies still need to buy allowances to cover their greenhouse gas emissions through the end of this year under EU environment rules.

The auctions have been halted since early 2019 due to the risk that Britain would exit the union abruptly and without a deal, erasing the need for polluters to buy the securities.

Bloomberg

Irish Independent