Spot allowances in New Zealand’s emissions trading scheme recorded a fourth straight week of gains as Climate Change Minister Paula Bennett’s comments on impending rule changes pushed the price above NZ$11 ($7.52) for the first time in nearly four-and-a-half years.
Bennett told a conference in Wellington on Wednesday that removing the 2-for-1 provision in the ETS was a matter of “when, not if”, adding confidence that emitters soon will have to surrender twice as many allowances annually.
The spot NZU price traded through NZ$11 a few hours after the minister’s comments and peaked at NZ$11.20 on Thursday, before ending the week at NZ$11.07, up 47 cents week-on-week.
The contract has now gained 20% over the past four weeks.
“It’s just ‘wait-and-see’ mode since Wednesday’s positive comments by the minister,” one market participant told Carbon Pulse.
More than a million allowances changed hands on CommTrade and Carbon Match over the week, the highest weekly trading volume seen in several years.
“Yesterday saw exceptional volume trade [of] over 400,000 NZUs. We expect to see additional moves, both in price and volume, with market participants establishing new levels. As expected, buying interest is in abundance,” brokers OM Financial said.
By Stian Reklev – stian@carbon-pulse.com
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