EU carbon prices surge to record levels

Number of investment funds active in EU ETS market up 50pc in 2021, exchange data shows

European carbon prices have risen by a third in the last three weeks, from €65/t ($73/t) to a record €87/t, mainly on increased buying by speculative and financial traders. EU carbon allowances (EUAs) have nearly trebled in price over the course of 2021, reflecting for the most part a steady increase in the theoretical fuel-switching level that drives utilities to switch off coal plants and generate power using natural gas. Natural gas prices rose over the first half of the year amid an extended winter heating season in Europe, with key exporter Russia accused by some of holding back additional supply amid delays to startup of the Nord Stream 2 pipeline to Germany. Benchmark front-month TTF