EU carbon price could crash again: report

LONDON (Reuters) - The price to emit the greenhouse gas carbon dioxide faces a repeat of its price crash last year on the European Union's carbon trading scheme, said a report by a London-based group opposed to closer EU political integration.

The report was attacked by some carbon market participants and lobbyists.

In 2006 the EU carbon price collapsed after it emerged that businesses had received too many permits to emit carbon dioxide, called EU allowances (EUAs), undermining the 27-nation bloc's flagship climate change strategy.

A repeat scenario was possible in the second trading cycle of the scheme from 2008-12, said Open Europe on Thursday.

The group called for countries globally to be allowed to choose how they meet tough, national emissions targets.

"The attempt to create a global carbon market and a 'global price for carbon' through trading is unlikely to be successful," the report said.

The EU carbon scheme involves big emitters like power plants.

From 2008 companies which bust their emissions targets can either buy extra EUAs or buy carbon credits through a separate carbon trading scheme under the Kyoto Protocol on global warming.

Kyoto carbon credits are generated from emissions-cutting projects in the developing world.