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Emission permits drop as UK September gas falls to record low

The price of European Union carbon dioxide permits fell to its lowest in almost two weeks as UK September natural gas dropped to a record, making it more likely power companies and factories will burn more gas and less coal. December 2006 allowances dropped as much as 25 cents, or 1.6%, to € 15.80 ($20) a metric ton. They were at € 15.85 on the European Climate Exchange in Amsterdam at about 6 p.m. local time. Coal produces about double the carbon dioxide for each unit of power produced, compared with gas. British gas for September fell as much as 1.4% to 32.50 pence a therm, a record low for the contract on the ICE Futures exchange in London. It was as high as 50 pence in April. Yesterday's low is the equivalent of $4.19 per million British thermal units. There's 100,000 British thermal units in a therm. Starting last year, about 12,000 factories and power plants in the EU must have a permit for each metric ton of carbon dioxide they emit. They may sell spare allowances for profit, if they emit less of the greenhouse gas than they have permits for. They must buy extra permits if they emit more. (Bloomberg)