EU Energy Policy

Ten-year high in EU carbon prices restores trust in ETS

Prices for EU carbon allowances hit their highest levels in 10 years this week and could trigger large-scale fuel switching from coal to gas earlier than expected Prices for EU carbon allowances hit their highest levels in 10 years this week and could trigger large-scale fuel switching from coal to gas earlier than expected.
By Andreas Walstad 23 August 2018 0 32269
Germany’s Lippendorf coal-fired power plant. (Vattenfall)

Prices for EU carbon allowances (EUAs) have risen by about 150% since the start of the year, restoring faith in a system many had written off. 

Exactly one year ago, EUAs were trading below €6 per ton ($6.94/t) and many doubted if the EU’s Emissions Trading System (ETS) would ever be fit to incentivise fuel switching and trigger investment in clean power. Twelve months later, and EUAs are trading above €20/t – the highest level in 10 years – and the consensus is...