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Carbon Market Update

Over the past month NZUs have been trading around the $20.30 mark on light to moderate trading. It would appear that the looming 31 May surrender date for emitters to surrender units for their 2010 emissions has yet to bring about any last minute buying in significant quantities as emitters may have already filled their quota for surrender. CER price in NZ dollar terms has fallen to around $23.20 which is the effective cap for NZUs but NZUs are trading a lot lower than this anyway.

So what are the likely factors in determining NZU price in the future?

  • The rate at which post-89 NZUs and pre-90 allocations are issued and how many come onto the market.
  • Demand from emitters leading up to the 31 May surrender date.
  • The purchase strategies of emitters after the 31 May when they will have a full 12 months to acquire NZUs before the next surrender date.
  • CER price in New Zealand dollar terms.