Spot NZUs traded up to NZ$7.10 ($4.86) this week, equalling the highest price of 2015, before sliding back to settle at NZ$7.05, a three-month high as demand was firm throughout the week, market participants said.

Close to half a million NZUs changed hands over the week, keeping the spot contract above the NZ$7 level, closing 15 NZ cents, or 2.2%, above last week.

“There are very few natural sellers around, but buyers are coming in as it is nearing the end of their emissions year,” one source told Carbon Pulse.

Emitters don’t have to surrender allowances to the government until next May, but demand tend to strengthen towards the end of the calendar year to keep books in order.

Spirits were raised as well as Climate Change Minister Tim Groser told an Auckland conference on Wednesday that the ETS review will get underway this year, although elements of it cannot be decided until after the UN climate conference in Paris.

Environment Minister Nick Smith followed up on Thursday, telling parliament the government is working to strengthen the ETS, although he did not go into detail.

By Stian Reklev – stian@carbon-pulse.com

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