(Bloomberg) -- The final 2024 offering of European Union carbon allowances cleared Monday at €63.64 a metric ton, the cheapest year-end auction since 2020 when the permits were less than half of today’s price.
While the annual auction break in December tends to help lift prices as buyers stock up ahead of the sales hiatus over the holidays, carbon has slumped toward the end of 2024. Mild weather and falling gas prices have weighed on the cost of permits.
On Monday, benchmark carbon futures for December fell as low as €62.73 per metric ton, the lowest since early November.
While the outlook for the coming week is bearish amid milder temperatures, the three-week pause in auctions “will lend some support to European carbon,” according to Henry Lush, EU carbon market analyst at Oslo-based renewables research firm Veyt.
“With the expiry of the EUA Dec-24 contract today, we can expect some additional volatility with a potential supportive bump as participants roll positions into the Dec-25 contract,” Lush wrote in a note.
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