The CO2 Market 13.04.2021

EU carbon prices hit a new record above €44 on Monday, 12.04.2021, extending last week’s top trade amid strong auction demand, a supportive energy complex, and bullish technical signals. The increasing trend toward €45 has been continued today with prices above €44 all day on.

Bloomberg forecast on the carbon price

According to Bloomberg, who released a market analysis on the 1st of April, “since mid-2016, however, allowances have been on a tear, increasing by a factor of 10 from just above 4 euros to 42 euros last month. After years of oversupply, the market is entering a period of expected future scarcity, financial investors are piling in, and prices are rising.”

The article pointed out that even higher prices are coming. BloombergNEF expects carbon prices to hit 100 euros/tCO2 by 2030, and 50 euro in the near future. Main reasons for this increase are the European decarbonisation targets, than in the medium term, we’ll see even more withdrawing of allowances, plus the end of power sector fuel-switching, in which “power fleet operators retire higher-emitting fuels such as coal in favor of lower- to zero-emissions options such as gas or renewable energy”.

From Carbon Expert’s twelve years experience on the European carbon market, we haven’t seen any of Bloomberg’s predictions that did not come true, and we are on the same opinion that all factors mentioned above will trigger the price on the uptrend in the middle run. We recommend the Romanian companies to do forward trades where the price is fixed now and the delivery of the credits and the payment shall be done at a later date, in one year or more.