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European Carbon Price Climbs to Fresh Record on Tight Supplies

  • Pollution allowances rise to as much as 94.94 euros a ton
  • Limited supply of permits, high gas prices are driving a surge
Power Generation in Germany
Photographer: Krisztian Bocsi/Bloomberg
Updated on

The cost of polluting in the European Union jumped to a fresh record, with utilities looking to burn more coal just as the supply of permits dries up.

Carbon futures rose for a fourth day, the longest winning streak in almost a month, as high natural gas prices incentivize utilities to use dirtier coal to produce power, which has become more profitable than gas to produce power. That requires companies to consume more permits -- not long after a key carbon auction was canceled earlier this week.