After Topping Commodity Gains in 2018, Carbon Set to Surge Again
The rising costs of pollution in Europe’s cap-and-trade system is likely to lift natural gas and power prices
Chimneys and cooling towers at the Neurath coal plant owned by RWE AG near Grevenbroich.
Photographer: WOLFGANG VON BRAUCHITSCHThe cost of pollution in the European Union’s cap-and-trade system is likely to surge again next year, contributing to rising electricity costs that are already uncomfortable for industry.
Carbon futures, reflecting the price factories and utilities pay for their emissions, tripled in 2018, making it the best performing major commodity of the year. Those contracts may surge again in 2019, by 20 percent to near $29 a ton or more for the first time in more than a decade, according to the median forecast of 13 brokers, analysts and traders surveyed by Bloomberg.