Over the year, 31.4 million tonnes were bought and sold, making the Paris-based market the biggest carbon exchange of its kind.

The price of a permit for one tonne of carbon dioxide was below 5.0 euros on Wednesday, from 15 euros at the start of 2006.

Powernext Carbon is part of a system in the EU to reduce carbon dioxide pollution in which energy providers and industrial companies are assigned emissions quotas.

Companies wishing to emit more carbon dioxide than their allocated quota have to buy permits from companies with a surplus, thereby creating an economic incentive to reduce pollution.

During 2006, news that companies had emitted less carbon dioxide than previously forecast and reports that European governments had been too generous in issuing pollution rights led to a sharp fall in the price of CO2 permits.

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