LONDON (Reuters) - European carbon emissions futures were at a one-week high on Wednesday, as rising British natural gas prices and prolonged cold weather supported prices, traders said.
EU Allowances for December delivery were 5 cents or 0.37 percent higher at 13.66 euros ($19.21) a tonne at 0917 GMT, after hitting an intra-day high of 13.78 euros in the first hour of trade. Prices last traded at these levels on January 20.
Traders said prolonged cold weather in Europe and higher natural gas prices compared to coal was fuelling demand for EUAs.
When natural gas prices rise, it is cheaper for utilities to burn carbon-heavy coal, fuelling demand for more carbon permits to cover the emissions.
"The lasting cold snap and deeper divergence between gas and coal is supporting prices," an emissions trader said.
Utilities are buying below 13.40 euros while financial institutions are selling around the 13.90 level, he added.
British natural gas prices have been on the rise as cold weather across Europe was forecast to stay for another two weeks, which stoked existing worries over dwindling fuel stocks.
European demand for coal remains muted but the cold weather snap has drawn down coal stockpiles and some utilities still short of a few prompt cargoes have been buying this week.
U.N.-backed certified emissions reductions were up 10 cents or 0.84 percent at 12.00 euros a tonne. The EUA-CER spread was at 1.66 euros.
Australia will stick to its 5 to 25 percent emissions cut range as part of a global commitment to fight climate chan
Australia will stick to its 5 to 25 percent emissions cut range as part of a global commitment to fight climate chan ge under thecontroversial "Copenhagen accord," the government said on Wednesday.
This depends on strong steps by India and China to reduce emissions, however.
Australia's main opposition coalition, which has repeatedly blocked attempts to pass carbon trading laws, is eyeing a voluntary scheme based on buying up cheap offsets as a way to break th 1696595969 deadlock.
According to documents obtained by Reuters, the scheme, funded with public money, would buy carbon offsets from energy efficiency and forestry projects, among others.