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EU carbon prices hit record 50 euros per tonne

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The cost of greenhouse gas pollution in Europe today is more than double the pre-pandemic level.

EU carbon prices hit record 50 euros per tonne

The European Union Emissions Trading System (ETS) carbon price has extended its record growth and surpassed € 50 per ton for the first time, bringing the cost of greenhouse gas emissions in the EU to more than double the pre-pandemic level. Since the beginning of the year, CO 2 prices in Europe have increased by more than one and a half times.

The growth has made carbon credits one of the most popular commodities in the world, even as growth in the sector has raised concerns about inflation. While environmentalists applaud the rising cost of pollution for electricity suppliers and industry, there are concerns that the rate of growth is higher than companies can afford.

Last week, businesses in the steel sector and other highly polluting industries such as petrochemicals and cement called on the EU to accelerate plans to introduce a carbon border adjustment tax on imports from non-member countries, fearing that they will be at a disadvantage.

The steel sector in Europe, for example, will face carbon costs of around € 2 billion this year at current price levels, despite the fact that member countries will provide most of the carbon permits for free. </p >

Under the ETS, companies are allocated a certain number of quotas to cover at least part of their emissions. If they reduce pollution, for example by using renewable fuels or natural gas instead of coal, they can sell the remaining allowances for profit. But if they increase pollution, they need to buy additional allowances to cover their emissions in accordance with the so-called emissions trading model.

Some analysts in the sector suggest that by the end of the decade, the price of allowances could reach 100 euros per tonne, which they believe is necessary in order to make alternative fuels such as green hydrogen competitive.

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