European carbon credits hit a 5-month high on Tuesday, as the market rallied on higher natural gas and weaker coal prices, and as a trading snag raised fears of a bottleneck in supply of cheap carbon offsets.
The European Union's emissions trading scheme (ETS) will now not link with a U.N.-run Kyoto Protocol scheme until 2008, the U.N. said on Tuesday, raising fears of an EU shortage of carbon offsets imported from developing nations, under Kyoto.
The link had been expected to complete in 2007, and a shortage of offsets would raise the demand for and price of EU emission permits, called EU allowances (EUAs)....MORE
