Europe is growing increasingly reliant on coal to keep the lights on as the weather turns cold, sending the cost of polluting to a record.
Carbon prices exceeded 70 euros for the first time ever as utilities turn to the dirtiest of fossil fuels.
Power plants in the U.K. are burning the most coal since the beginning of the month to keep the lights on as the cooler-than-normal weather and sub-zero temperatures are forecast for major cities this week.
Europe is facing an energy crisis as economies emerge from the pandemic and people return to the office.
That’s boosting demand at a time supplies remain limited. Years of reduced investments in fossil fuels have combined with low wind speeds this year to send gas, power, and carbon prices to record highs and bringing down some energy retailers.
With shortages of natural gas sending prices quadrupling this year, traders are preparing to burn more coal this winter, and that will require more pollution permits.
At the same time, the European Union has increased its climate ambitions, vowing to cut emissions faster this decade. That means the carbon price will have to increase more quickly.
“Our current gas to coal switching curve points to the fact that Europe will be burning coal at least until March 2023, thus increasing CO2 emission,” analysts at ClearBlue Markets wrote in an emailed note.
Benchmark carbon futures for December gained as much as 1.5% to a record-high 70.43 euros per metric ton on ICE Endex before easing to 70 euros by 1:51 p.m. in Amsterdam. Prices have more than doubled this year.
BloombergNEF expects carbon to cost more than 100 euros per ton by 2030.
Read rest at Bloomberg
Now lets measure the EU Carbon Footprint compared to Americas
The requirement to buy carbon permits is a self inflicted injury. They shouldn’t exist. However, it is the little guy who ends up paying so who cares?
From the article, “utilities turn to the dirtiest of fossil fuels.” If the soot and sulfur are removed from the exhaust coal is not a dirty fuel. It has the most carbon dioxide per unit of energy but CO2 is good for the earth. Increased crop yields and an over all greening of the earth show that.