Carbon tariffs rise to record level in Europe

12 Apr 2021

Indicator carbon tariffs in the European Union exceeded 50 Euros per tonne for the first time, driven by increasing investor demand

The cost of air pollution in the European Union has exceeded 50 Euros per tonne for the first time, confirming the energy transition in the region. The increase in forward carbon tariffs makes air pollution more expensive and directs sectors to seek cleaner energy.

Ulf Ek, CIO of London hedge fund Northlander Commodity Advisors, predicted that the rally could continue and futures contracts could rise up to 75 euros by the end of the year. In his evaluation via e-mail, the expert said, "It is difficult to determine when we will exceed 100 Euros in carbon emissions, but the sooner it happens, the better it will be for the environment. We think prices can go higher than this. However, if it moves above 100 Euros, harsh political discussions may begin."

Carbon futures on ICE Futures Europe rose by 1.3 percent today to 50.05 euros.

In March last year, prices fell below 15 Euros as the pandemic limited industrial activity.

While leaders in Brussels were taking steps for a green economic recovery, it appeared that the difficulties experienced in the carbon market would be temporary. A few days before the EU's 'Green Deal' in July, futures contracts rose above 30 Euros for the first time in more than 10 years.

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