EU Carbon Market Rebound: Will it last?
Impact of carbon prices on Europe's power market
IHS Markit examines the current carbon prices in the EU’s Emissions Trading System (ETS) with forecasts to 2030. While the EU cap-and-trade program delivers some financial consequences that are intended to curb carbon emissions by large emitters over the long term, at what point will Europe see a tipping point in carbon pricing by 2020 that makes coal too costly? What other EU power market determinants are significant?
The IHS Markit report covering the EU Carbon Price Outlook:
- Recent bull run in the context of long-term European market fundamentals
- EU carbon price forecasts and other influences on coal plants in the long run
- Renewables long-term visibility for finance
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A recent dramatic rise in carbon pricing
Recently, the Carbon market in Europe has gone from strength to strength. Since the start of 2018, the carbon price has been on a steady surge, which has lifted it to €16 per metric ton, up from a low of under €4 in September 2016. This newfound dynamism contrasts sharply with the past few years.
Will higher carbon prices influence Europe’s power mix? Ultimately, what role can the carbon prices in EU play in the decarbonization of the power market mix?