© Reuters. FILE PHOTO: Steam rises from the cooling towers of the coal power plant of RWE, one of Europe’s biggest electricity and gas companies in Niederaussem, Germany, March 3, 2016. REUTERS/Wolfgang Rattay/File Photo
(Reuters) – The European benchmark price for carbon allowances on Monday climbed above 70 euros ($78.88) per tonne for the first time since the European Union’s carbon market launched in 2005.
The December 21 EUA contract touched a high of 70.43 euros per tonne. It traded at 69.77 euros per tonne by 1016 GMT.
Colder weather and less wind power output this week left more room for fossil fuel generation, which could translate into higher demand for EUAs, Refinitiv analyst Ingvild Sorhus said in a morning comment.
“That said, with Europe being the epicentre of the COVID-19 pandemic, worries over more lockdown measures and lower activity could weigh on markets and also carbon,” she said, adding that the overall outlook remained bullish.
Monday marked the sixth consecutive day of European carbon allowances setting an all-time high.
The carbon market has been boosted by agreement on global carbon trading at the U.N. Climate Summit and surging gas prices, that lifted it above key technical resistance levels, according to analysts.
High gas prices make it more economical for power companies to burn coal, which emits twice the amount of carbon dioxide as gas power plants, requiring more carbon permits.
($1 = 0.8875 euros)
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