July 18, 2014 / 4:52 AM / 3 years ago

NZ carbon falls further as emitters stay away

2 Min Read

July 18 (Reuters) - Spot permits in New Zealand's carbon market fell for the third consecutive week, dropping to NZ$4 ($3.47) on Friday, as traders remained hesitant to take significant positions ahead of the September general election.

The spot New Zealand Units (NZUs) fell 2.4 percent, or 10 NZ cents, week-on-week and even fell into the NZ$3s for the first time in two months before ending the week on NZ$4.

"Emitters, in particular, are not keen to step up until they get more direction from the political parties," one broker told Reuters.

Some 270,000 permits changed hands during the week, most of it picked up by two emitters from a number of small forest-owners, market sources said. Beyond that, market demand was modest.

After an unexpected rule change caused a spike in prices in late May, the NZ emissions market has been stuck in a state of flux in the past six weeks as uncertainty looms over who will win the election and what that might mean for the emissions trading scheme.

The latest polls show the ruling National party ahead. Should they retain power, no immediate changes to the scheme are likely.

But in a scheduled review of the market next year the government may add to supply to compensate for NZ losing access to cheap U.N. offsets after 2014 compliance is over.

Traders said Australia's move on Wednesday to scrap its planned emissions trading scheme had no impact on the New Zealand market, as no link between the two had been planned. (Reporting by Stian Reklev in BEIJING; Editing by Muralikumar Anantharaman)

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