The CO2 Market 16.03.2021

The EU ETS Price

EU Allowances hit a record high above 43€ on Tuesday (15.03.2121), surging late on higher power, gas, and equities and as a Brussels official urged caution on possible carbon price controls.

The price of the EUA certificate on the ICE ECX London opened this morning (16.03.2021) the EUA trade sessions at  € 42,21 / tCO2.

The expectation of higher carbon prices may have prompted industrial firms to start hedging their emissions early this year. That added to demand for allowances—as did unusually cold weather, which boosted the demand for heating (the ets does not cover boilers in homes, but it includes large ones, such as those that heat many buildings). Speculators may have accelerated the price rise, by buoying futures prices. Around 230 investment funds hold futures linked to allowances, up from 140 in 2019. They account for only about 5% of the futures market, but it is a growing, bullish share. Long positions, or bets that the price will rise, have doubled since November.

Source: ICE ECX & Carbon Pulse London, Carbon Pricing Leadership Coalition