Kyoto Emissions Market Is 17% Oversupplied
57.8 billion CO2 tonnes of Assigned Amount Unit Credits have been assigned to the 38 industrialised nations under the Kyoto Protocol for the period until 2012. Expected emissions however will be around 49.5 billion tonnes, according to Point Carbon.
We were assured this would not be the case following the failure of the carbon market in the period until 2007 due to an oversupply of free credits to companies.
An article from Bloomberg says that EU CO2 Permits just had their worst quarter since 2006, second-worst quarter ever as industrial output slows, curbing demand.
“This quarter’s decline of 22 percent is more than any other quarter except the three months through June 30, 2006, when it fell 27 percent. That was when regulators disclosed the EU program was oversupplied in the three years through 2007, the system’s first phase.”
…
“On Sept. 12, European industrial production fell more than economists forecast and payrolls grew at the slowest pace in almost two years as the region’s economy teetered on the brink of recession.
Output in the 15-nation euro area fell 0.3 percent from June, its third consecutive drop, the European Union statistics office in Luxembourg said. The drop exceeded the 0.2 percent median forecast of 31 economists in a Bloomberg news survey.”