Free Market Magic!! EU Carbon Credit Price Collapsing - On Track For 40% Drop Almost Overnight
The price of carbon permits in Europe has crashed dramatically following Russian’s invasion of Ukraine, lowering the cost of emitting carbon for the EU’s most polluting companies.
Permit prices, which are part of the EU’s emissions trading scheme, were launched in 2005, and reached a high of €97 (£80) in early February, but have now slumped below €70. Prices were on course to drop to almost €60 on Wednesday afternoon, representing the biggest fall since 2014.
The carbon price is the EU’s flagship financial mechanism for curbing emissions, with companies, such as airlines, forced to buy the permits when they pollute. But investors appear to be pulling out of the market, with some experts saying they have been “spooked” by Russia’s invasion of Ukraine. The carbon price usually moves with energy prices but it has decoupled because of Vladimir Putin’s war.
Ingvild Sorhus, a lead analyst for EU Carbon Analysis, said: “The escalating Ukraine crisis continued to spook investors’ sentiment and led to widespread liquidation of EUA positions. “Carbon prices are currently decoupling from the rest of energy complex, which rose on Russian supply concerns. Some participants perhaps suffered huge losses due to the spike in energy prices and were forced to sell EUA to avoid margin calls.
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https://www.theguardian.com/environment/2022/mar/02/eu-carbon-permit-prices-crash-after-russian-invasion-of-ukraine