(Montel) Europe’s benchmark carbon price hit its sixth record high in less than two weeks on Wednesday following continued gas gains.
Carbon has increased by almost 11% over the past two weeks, up more than EUR 6.
A rise in gas spot prices above EUR 55/MWh was “certainly a main driver”, one trader said.
The front-month Dutch TTF gas contract reached its own record high of EUR 55.32/MWh and was last seen up EUR 1.25 at EUR 55.16/MWh.
Low Russian flows have combined with below-average storage levels in Europe to push prices up.
Primary supply of EUAs has also been reduced by 24% through the market stability reserve (MSR) mechanism.
Carbon has risen about 95% this year mainly boosted by bullish EU policy proposals and strong gas prices.
Generally, a gas power plant emits about half the CO2 than one burning coal. As soaring gas prices make it cheaper for power plants to burn coal, it could mean higher emissions and more demand for carbon allowances.