Australia notches up biggest carbon trade: broker

Reuters) - Australia has recorded its largest transaction in carbon emissions, with 20,000 tonnes of carbon sold forward at A$21.50 ($19.51) a tonne, a carbon broker said on Friday, as the nation prepares to curb greenhouse gases.

Australia, the rich world's largest per-capita emitter of greenhouse gases, plans to cap emissions from 2010 and introduce a carbon-trading system where businesses that pollute less can sell emission credits to those firms that pollute more.

"I believe it to be the biggest deal that's been done," said Gary Cox, head of environmental derivatives for Newedge Group in Australia. He declined to give details on the buyer or seller.

An over-the-counter market in carbon emissions has emerged this year as businesses such as coal-fired power generators look to hedge uncertainty surrounding the eventual price of carbon when Australia's proposed cap-and-trade system kicks off.

Speculators are also looking to make money by providing badly needed liquidity to the emerging market in carbon dioxide.

The latest deal is for delivery in February 2012 and was finalized last week, Cox said.

Though it was the largest deal to date, he added, at 20,000 tonnes it was still tiny compared with the few millions of tonnes of carbon emitted each week by Australia's power industry alone.

"It's a drop in the ocean," Cox said, adding that buyers and sellers were still feeling their way, starting with small deals and gradually expanding them as confidence and liquidity grew.

Carbon is trading in Australia at around half the level of prices in the more mature markets of Europe where carbon credits -- permits to pollute -- for December 2008 delivery have been trading at around 26 euros ($39.83) a tonne.

Australia's Westpac bank and utility AGL Energy are credited with Australia's first carbon deal in May this year.
($1=.6528 euro)
($1=A$1.102)

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