CO2 shrugs off the Covid-19 slump

Future policy assumptions support the EU ETS after initial hit

European energy markets have been thrown into turmoil by the coronavirus pandemic, with prices for some commodities falling by more than 50pc as demand has plummeted during the enforced lockdown. A combination of housebound workers and a slowdown in commercial and industrial activity has also tipped countries into recession, blighting the economic outlook for the coming months and even years. But European carbon allowance markets are remaining robust, reflecting growing confidence that a long-term economic recovery will focus on low-carbon and sustainable policies. The sudden and sharp decline in economic activity since March did, admittedly, feed through to Europe’s emissions trading system