EU carbon price hits record €50 per tonne on route to climate target The European Union carbon price hit a record high of above €50 per tonne on Tuesday (4 May), a key milestone in what analysts say is likely a long-term climb towards the price levels needed to trigger investments in innovative clean technologies. The EU carbon market is the bloc’s main tool for curbing greenhouse gas emissions that cause climate change, forcing power plants, industry and airlines running flights within Europe to buy permits when they pollute. With the bloc striving to meet tougher climate goals – including a new target to cut net greenhouse gas emissions by at least 55% by 2030 – the market has found more impetus. The benchmark EU Allowance (EUA) price hit €50.05 a tonne on Tuesday, the highest since the carbon market launched in 2005. The benchmark December 2021 contract has soared around 50% since the beginning of the year. “There’s a basket of bullish factors, that is really why we see prices up at these levels,” Refinitiv analyst Ingvild Sorhus told Reuters. These include policy support from the EU’s new climate goal, plus increased permit demand from financial investors tempted into the market by soaring prices and a consensus among analysts that prices are likely to climb further in the coming years. Brussels will this summer present a package of policies to slash emissions across all sectors to meet the 2030 target, including reforms to the EU carbon market. That is expected to lead to greater demand for CO2 permits and to make them more scarce. Analysts say the EU carbon price now needs to rise to levels high enough to trigger CO2 cuts in industry, where low-carbon alternatives cannot yet compete on cost with traditional fossil-fuel based technologies. “The carbon price has to reach high enough to enable the European Union to reach net zero by 2050,” said Mark Lewis, chief sustainability strategist at BNP Paribas, referring to the bloc’s long-term goal to eliminate its net emissions by 2050. That would require a CO2 price high enough to make hydrogen fuel produced from renewable energy competitive with hydrogen produced from fossil fuels, Lewis said. “On this basis, I think around €90 a tonne is a reasonable expectation by 2030.” https://www.euractiv.com/section/energy-environment/news/eu-carbon-price-hits-record-e50-per-tonne-on-route-to-climate-target/