{"id":137543,"date":"2021-09-02T04:42:52","date_gmt":"2021-09-02T04:42:52","guid":{"rendered":"https:\/\/precoinnews.com\/?p=137543"},"modified":"2021-09-02T04:42:52","modified_gmt":"2021-09-02T04:42:52","slug":"nz-carbon-price-hits-record-59-tonne-after-strong-emissions-trading-scheme-auction","status":"publish","type":"post","link":"https:\/\/precoinnews.com\/business\/nz-carbon-price-hits-record-59-tonne-after-strong-emissions-trading-scheme-auction\/","title":{"rendered":"NZ carbon price hits record $59\/tonne after strong Emissions Trading Scheme auction"},"content":{"rendered":"
New Zealand carbon prices hit a record $59 a tonne this week after a stronger-than-expected quarterly auction.<\/p>\n
The price hit a high of $53.85 at the auction on strong demand, and kicked higher in the<\/span> secondary market once the auction closed.<\/span><\/p>\n Buyers took up all 7 million units for 2021 under the market’s new cost containment reserve, along with the 4.75 million on offer in the Government-run sale.<\/p>\n At today’s level, the price is more than double where it was in March 2019.<\/p>\n Nigel Brunel, head of commodities at Jarden, said demand at the auction was surprisingly strong, which led to prices in the secondary market spiking higher.<\/p>\n “There are a few things driving this market higher,” Brunel said.<\/p>\n “One is the that you are probably not going decarbonise New Zealand with the carbon price in the $50s region,” he said.<\/p>\n Climate Change Commission modelling suggests the carbon price would need to be at $140 a tonne by 2030 for New Zealand to achieve its net carbon neutral goal by 2050.<\/p>\n The Emissions Trading Scheme (ETS) auctions are the Government’s main tool for meeting domestic and international climate change targets.<\/p>\n New Zealand passed multipartisan climate legislation in late 2019 that set a target of net zero by 2050 for carbon dioxide emissions and set up an independent expert body, the Climate Change Commission, to decide on a path to get there.<\/p>\n Brunel said carbon prices under various schemes had been rising worldwide.<\/p>\n Prices in the European Union’s emissions trading system are expected to rise significantly in the next decade due to tougher climate goals.<\/p>\n London’s Financial Times reported on Monday that the EU carbon price had touched an all-time high as the prospect of tighter environmental regulations, as well as a brief reduction in supply this week.<\/p>\n EU Futures prices passed \u20ac61 ($102) in intraday trading \u2014 double their levels from a year ago \u2014 before falling back to close at \u20ac60.60, the paper said.<\/p>\n The EU compliance market trades in credits, known as allowances, that give the owner permission to emit one tonne of carbon dioxide.<\/p>\n Larger producers including most coal power plants are required by the EU to purchase enough allowances to cover their emissions.<\/p>\n