European Union carbon permits for December rose, posting their biggest weekly gain for two years, after Germany decided to close 7 gigawatts of nuclear capacity.
Carbon allowances for December rose 2.6 percent to close at 17.22 euros ($24.41) a metric ton on the ICE Futures Europe exchange in London. They had a weekly gain of 9.5 percent, the biggest jump since March 2009.
Lower generation of nuclear power will require power utilities to burn more fossil fuels, boosting emissions and demand for permits. Japan upgraded its warning for parts of the Fukushima Dai-Ichi plant from a four to a five on a seven-level international scale, the International Atomic Energy Agency said yesterday. The five rating is for accidents with wider consequences. The worst nuclear accident, Chernobyl in 1986, rated seven.
“The longer the situation in Japan remains critical, the greater political pressure in Germany to keep the 7 gigawatts offline,” Mark Lewis, an analyst in Paris with Deutsche Bank AG, said today by phone. “I think it is now looking increasingly likely that at least 1 to 2 gigawatts of the 7 gigawatts will not be brought back into service.”
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