The spread between European Union and United Nations emission permits  narrowed to its lowest in three months as supplies were little changed in the second quarter compared with a year earlier.

The spread, traded as a contract  on the European Climate Exchange in London, narrowed 7.2 percent today to 1.41 euros ($2) a metric ton as of 12 p.m. local time, its lowest since April 1. EU carbon dioxide allowances for December were at 13.43 euros a ton, while UN credits were at 12.10 euros.

UN issuance of Certified Emission Reduction credits was little changed in the quarter ended yesterday compared with a year ago. The UN Framework Convention on Climate Change, which serves as the executive board of the Clean Development Mechanism, issued 36 million metric tons in the quarter, compared with 35.5 million in the same quarter last year, according to data on Bloomberg.

The spread may contract to less than 1 euro, assuming continued low demand for EU permits because of the economic recession, Dennis Mignon, a trader with First Climate in Bad Vilbel, Germany, said last month.


Source: Bloomberg