NZ carbon price breaks through $20, seen rising higher

Article – BusinessDesk

The New Zealand carbon price has broken through the $20 a tonne mark, as it continues its push higher on speculation the new government will lift a cap on the maximum price emitters pay.NZ carbon price breaks through $20, seen rising higher

By Tina Morrison

Dec. 7 (BusinessDesk) – The New Zealand carbon price has broken through the $20 a tonne mark, as it continues its push higher on speculation the new government will lift a cap on the maximum price emitters pay.

The price for a New Zealand carbon unit under the Emissions Trading Scheme last traded at $20.25 per tonne on OMF’s CommTrade platform, having jumped higher after Green Party leader and climate change minister James Shaw told industry publication Carbon News last week that he believes carbon prices need to be higher than the current cap of $25 per tonne.

“There is virtually zero momentum in this market for a downside move,” Nigel Brunel, financial markets director at OMF in Auckland, said in a note yesterday. “Carbon is on the move; we believe this market will be nearer $22 come February/March. The current government/Greens have clearly signalled higher ambition and a desire to see carbon prices above $25.”

New Zealand is reviewing its emissions trading scheme, which currently includes a $25 per tonne cap on the price emitters have to pay the government for liable emissions. Carbon prices have accelerated since Shaw told Carbon News last week that he expects to announce before Christmas the process to establish a climate commission, and that officials are about to begin work on outstanding issues from the latest review of the ETS, including the carbon price cap. Shaw told Carbon News that he believes carbon prices need to be higher than $25, although he noted the commission will have some say over those prices.

The carbon price had collapsed from a high point of $21 a tonne in 2011 to trade as low as 35 cents a tonne in 2014 as cheap eastern European carbon units flooded global markets already reducing emissions due to lower industrial activity after the 2008 global financial crisis.

The $25 per tonne maximum capped price for New Zealand units aimed to stop major industrial emitters facing spiking carbon prices, after rules were tightened to prevent local emitters from accessing international carbon markets, making NZUs the only carbon emission units obtainable by emitters.

(BusinessDesk)

Content Sourced from scoop.co.nz
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