July 13, 2020 / 8:26 AM / a month ago

UPDATE 1-European Union carbon permit price hits 14-year high

(Adds more detail, comment)

By Nina Chestney

LONDON, July 13 (Reuters) - The European Union’s benchmark carbon permit price hit a 14-year high at just over 30 euros per tonne early on Monday.

The price for permits for delivery in Dec. 2020 traded under the EU’s Emissions Trading System (EU ETS) was 30.13 euros a tonne at 0819 GMT, the highest since 2006.

The EU ETS is the EU’s main tool for curbing greenhouse gas emissions and was launched in 2005. It charges power plants and factories for each tonne of carbon dioxide they emit.

Traders said the move was likely due to a combination of factors.

Short-term weather forecasts were supportive as wind output has been revised lower, they said. Lower wind generation typically raises demand for energy from power plants.

Technical levels were giving support. The correlation between carbon permit prices and equity indexes has also been quite strong in recent months.

“Our updated weather forecast, showing little wind in central Europe, provides a bullish signal for carbon prices today,” said analysts at Refinitiv.

“Stock market analysts expect European equities to continue Friday’s gains despite worrying COVID-19 developments in the U.S.,” they added. (Reporting by Nina Chestney; editing by Jason Neely and Mark Potter)

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