* EU carbon proposal set for July 25, lacks details
* EU carbon prices pare early losses
* CERs down over 70 pct in past 12 months
(Adds quotes, background)
LONDON, July 18 Benchmark carbon credits backed
by the United Nations plunged 11 percent to a fresh record low
early on Wednesday, taking a cue from a sharp drop in European
Union emissions allowances amid uncertainty about an EU supply
Traders and analysts attributed the fall in carbon prices to
news late on Tuesday that the European Commission will delay
providing details about the number of allowances that could be
withheld from the oversupplied market until September.
"It is very clear that everybody in the market was expecting
something to be announced in July and that was priced in,"
Isabelle Curien, an analyst at Deutsche Bank, said. "It is
clearly bad news for the market."
The front-year certified emissions reductions (CERs)
hit a record low of 2.92 euros ($3.57) in early
trading, down nearly 11 percent from Tuesday's close.
It was trading at 3 euros, or down 8.5 percent, at 0724 GMT.
In the EU carbon market, the benchmark emissions allowance
was trading down 6.3 percent at 7.20 euros, after
hitting a morning low of 6.80 euros.
CER prices have lost around 70 percent of their value over
the past 12 months, beset mainly by the supply glut and flagging
demand due to a slowing European economy.
Most of the demand for CERs comes from the EU emissions
trading scheme, the world's biggest carbon market, which itself
is oversupplied by over 1 billion carbon permits. Many analysts
expect the EU scheme to be oversupplied at least through 2020.
Benchmark EUA prices hit a record low of 5.99 euros in early
April, but have since recovered due to growing expectations that
EU regulators would this month propose to fix the oversupplied
market by delaying the sale of up to 1.2 billion carbon permits
for several years.
The European Commission will on July 25 debate a legal
framework to revise the timetable for auctioning carbon
allowances to bolster prices on the EU's weakened emissions
trading scheme, a document seen by Reuters showed.
But traders said the market will remain edgy without
"Now that there will not be any concrete figures, someone
has taken that to get out of their long positions," said a
trader at a large European utility.
"A few people had anticipated that July 25 would be a date
when the Commission would make a very bullish statement," he
($1 = 0.8188 euros)
(Reporting by Jeff Coelho; editing by James Jukwey)