The spot price for emission credits in New Zealand’s carbon market rose 2.8 percent this week as demand outstripped supply for the short term, Auckland-based broker OMFinancial Ltd. said today.
Carbon credits rose to NZ$20.35 ($14.83) per ton from NZ$19.80, the broker said in an e-mailed statement. Companies in New Zealand that emit greenhouse gases have the option to pay a carbon tax of NZ$25 a ton of emissions or buy carbon credits.
“Buyers appear exasperated by the lack of volume and are now wondering if enough volume will ever appear to satisfy present demand,” according to the statement. “We recommend owners of spot and forward units take advantage of this spike.”
In New Zealand’s carbon trading system, credits are divided into units backed by forests planted before 1990 and after, in accordance with the Kyoto Protocol. The government is still allocating units to farmers with pre-1990 forests. They may be available from November, OMFinancial said.
The government is also issuing credits to companies facing competition from countries where firms aren’t penalized by a carbon tax. The allowances, called Emissions Intensive Trade Exposed units, or EITEs, can also be traded and are expected to reach the market soon, according to the statement.
OMFinancial expects the overall market through 2012 to be oversupplied by about 37 million tons, the broker said.
