Photo by Marcin Jozwiak | Unsplash

On Friday, February 3, 2022 the price of carbon reached an all-time high of EUR 95. Market “glitches”and a switch from Russian natural gas to Australian coal in Europe are blamed for the increase. (Yes, that highly technical term “glitch” is being reported!)

This week, market analysts expect to see the price of carbon cross the EUR 100 mark. There are two things to note about this milestone.

First, we’ve reached this moment far faster than expected. Just nine months ago The Financial Times published a carbon price forecast that put the EUR 100 price point in 2028. But here we are, six years early.

The Price of Carbon: Actual vs Forecast

Second, with European companies under carbon regulations already, this price swing translates into an unexpected cost for companies, who then ask regulators to relax the rules. We are approaching that moment: Will emission reduction pledges be kept? Will regulators change the rules? Will emissions soar with increased use of coal? 

February will be an interesting month!

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