European carbon prices surpassed 85 euros due to higher compliance buying caused by a rapid increase in coal-fired power output in the bloc, resulting in an estimated 60 megatonne of additional carbon emissions.
Demand was three times higher than the auctioned quantities in the most recent auction, providing strong support to the exchange traded market.
After Russia cut its gas supply to Poland and Bulgaria in late April, European Union Allowances futures prices rose above 90 euros on May 6 and on May 17. More demand for fossil fuels implies increased emissions, which is expected to further push up carbon allowance price as more businesses need these credits to offset carbon footprints.
