* Rejection of carbon market plan prompts sell-off
* EU carbon price drops to 2.46 euros a tonne
(Adds detail, comment)
LONDON, April 17 The benchmark contract for
European Union carbon futures fell to a record low on Wednesday,
a day after the European Parliament rejected a plan to reduce
supply to raise prices.
EU carbon futures for December delivery dropped 20
percent to as low as 2.46 euros ($3.23) a tonne before
recovering slightly to 2.55 euros by 1318 GMT.
A rescue plan for the market was rejected by European Union
lawmakers on Tuesday. Carbon prices have tumbled 90 percent
since 2008 because of reduced demand amid the global economic
The rejection surprised many traders and prompted a sell-off
that continued into Wednesday.
"We're oversold right now," one emissions trader said,
adding that the fall was largely because of speculative
Analysts have warned that prices could fall to less than 2
euros and even close to zero in the coming weeks.
Traders said that the outcome of Tuesday's vote was a
setback for the market, but that they expect the proposal to be
reworked and put before parliament again before July.
($1 = 0.7616 euros)
(Reporting by Nina Chestney and Michael Szabo; Editing by
Anthony Barker and David Goodman)