Analysts have warned carbon prices in the EU emissions trading scheme (EU ETS) could plunge to new depths of below €6 (£4.70) a tonne if uncertainty around the commission’s plans to solve a glut of permits in the market continues.

Reports earlier in the week suggested details on how to fix the market’s current oversupply problem would not come until after the commission’s August recess, prompting prices to fall by more than seven per cent in an already heavily depressed market.

Permits traded in the EU ETS, known as EU Allowances (EUAs), fell to a low of €6.80 per tonne of CO2 yesterday, down almost 12 per cent on the day, before recovering to €7.18. Meanwhile, Certified Emission Reduction credits (CERs), UN-backed permits that normally track EUAs, fell by just under 13 per cent to a record low of €2.86 in early trading.

Carbon prices have lost more than 60 per cent of their value since the beginning of last year and are now languishing far below the €40 to €50 per tonne level many analysts believe is necessary to drive large-scale low-carbon investment.

The low prices have led a number of EU countries, including the UK, to push for measures to strengthen the price, such as delaying the sale of new allowances, known as “backloading”, or raising carbon reduction targets from 20 per cent cuts on 1990 levels by 2020 to 30 per cent – a move that would effectivelty increase demand for credits.

EU climate change commissioner Connie Hedegaard seemed to have heeded these calls by bringing forward a review of the ETS from 2013 and promising an announcement on how to tackle the oversupply problem before the summer break. But while Hedegaard is expected to make an announcement next Wednesday about backloading, reports suggested it would not include details on how many permits could be withheld – a key detail analysts require if they are to predict the likely impact of any changes on carbon prices.

Matthew Gray, a carbon analyst and trader at Jeffries, told BusinessGreen that without further clarity prices could continue to drop, potentially dipping below the previously unbreached €6 a tonne mark.

“There’s a lot of political uncertainty surrounding the backloading proposal,” he said. “Unless the commission provides urgent details on the backloading plan, we will likely dip to €5.99.”