EU Greenhouse Gas Emission Allowance Prices Surge... Expected to Exceed 100 Euros per Ton Within the Year

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 8th (local time) that the price of European Union (EU) carbon emission allowances is expected to surpass 100 euros per ton before Christmas.

On this day, the EU carbon emission allowance price surged to an all-time high of 89.37 euros per ton, approaching the 90-euro mark. Since early last month, the EU carbon emission allowance price has risen sharply by nearly 50%. At the beginning of this year, the price was trading around 30 euros per ton.

Considering the recent steep rise, it is expected that the price will exceed 100 euros per ton not only within this year but also before Christmas.

Recently, tensions between Russia and the West over Ukraine have increased, causing a sharp rise in greenhouse gas emission allowance prices.

As tensions with Russia escalate, concerns about disruptions in Europe's major energy source, natural gas supply, are growing. With expectations that coal usage will increase instead of natural gas, emission allowance prices are rising.

On this day, the natural gas futures price at the Netherlands TTF exchange, which serves as the benchmark for European natural gas prices, also showed an intraday surge of up to 10%. The closing price rose 7.4% to 102.9 euros. Natural gas futures prices had fallen to 64.7 euros by the 29th of last month but have been rising sharply since then.

Barbara Lambrecht, an analyst at Commerzbank, explained, "The rise in European natural gas prices is driving up carbon emission allowance prices."

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