The price of a tonne of CO2 emitted has almost tripled in a year. According to the expert, the price will be raised by the shortage of natural gas and the tightening of emission limits.
Allowance the price of EU emissions trading was over 80 euros on friday. The rise exceeds all forecasts and means that the price of allowances has almost tripled in a year.
Exactly one year ago, a tonne of carbon dioxide allowances cost 29.5 euros. As early as the beginning of this year, the price was forecast to remain at around EUR 40.
According to energy market experts, the price of emission rights will be raised by the shortage of natural gas and the resulting rise in gas prices in Central Europe. In Central Europe, heating and electricity generation also consume a lot of natural gas.
Exceptionally cold weather has been forecast for both Europe and the Nordic countries, which is exacerbating the situation.
“Natural gas is now expensive relative to coal, which means that energy companies have to burn coal and buy allowances to do so,” said the strategy manager. Vesa Ahoniemi Fortum says.
Combustion of coal emits about twice as much carbon dioxide as natural gas. For lignite, the ratio is even worse, about 130 percent higher than for natural gas.
However, coal is so cheap compared to natural gas that even after the price of allowances, it is now worth burning lignite.
“Coal use in Europe will increase somewhat this year compared to last year, but is likely to remain lower than 2019,” says Ahoniemi.
Ahoniemen According to, the discussion that started last summer about tightening emission targets has also affected the price of emission rights throughout the autumn.
“The market is discounting, that is, lowering the upcoming tightening price already now,” he says.
According to Ahoniemi, the price of electricity in Central Europe has a very straightforward effect on the price of electricity. The rise of the euro in the price of emission rights will increase the price of a megawatt hour in the electricity market by about 60–70 cents.
This increase may not be directly reflected in Nordic prices.
“In the Nordic countries, prices are affected by bottlenecks in transmission connections, for example. On the other hand, the water situation has improved. Spot prices for electricity have seen unusual spikes here too, but they are not directly due to the price of allowances. ”
Vattenfall market expert Peter Strandberg believes that the price of emission rights will also affect the exchange price of electricity in the Nordic countries.
“The German price is hitting our stock prices too. On Monday, electricity had to be imported from southern Sweden, which is very exceptional, ”he says.
“I have to hope that all the big power plants will be running smoothly this winter.”
Emissions trading is a mechanism for directing action to reduce CO2 emissions where it is most effective.
Companies in the emissions trading sector, in particular large-scale industry and energy companies, must acquire one allowance for every tonne of CO2 they emit.
The number of allowances on the market will be gradually reduced.
The emissions trading scheme covers more than 40% of the EU’s total greenhouse gas emissions and in Finland just under half of the greenhouse gas emissions.
.
#Energy #price #emission #rights #suddenly #jumped #alltime #high #felt #price #electricity #Finland
