EU Energy Policy

Coal still trumps gas in Europe despite carbon rally

Prices for EU carbon allowances have rallied in recent months but are still not high enough to provoke large-scale switching from coal to gas Prices for EU carbon allowances have rallied in recent months but are still not high enough to provoke large-scale switching from coal to gas.
By Andreas Walstad 11 June 2018 0 31230
The Staudinger coal power plant, Germany Inside a German coal power plant. (EP)

Prices for carbon allowances under the EU’s Emissions Trading System (ETS) have climbed to their highest levels for several years, largely as a result of economic growth and market reforms to limit the number of surplus allowances, which is estimated at 1.65 billion. The benchmark December 2018 contract has traded at around €16 per ton ($18.90/t) in recent weeks, which is more than €10/t higher than a year ago. 

Higher carbon prices are reducing the profitability of coal-fired power plants,...