Last-minute power plant hedging will push up carbon prices
Prices for European Union carbon allowances (EUAs) will rise sharply in 2012 as companies hurry to hedge their emissions compliance requirements by the end of that year.
EUAs are predicted to cost €22 per tonne of carbon dioxide (t/CO2e) in 2011 and €25 t/CO2e in 2012 as the market expects an increase in demand from power companies that have not hedged additional supply before the second half of 2012, says carbon advisory firm Point Carbon.
"Hedging profiles within the power sector vary significantly across European companies and regions," says Kjersti Ulset, head of European carbon analysis at Point Carbon. "Typically, large companies in north-western Europe
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