For the first time since the European Union introduced the CO2 emission rights, the price of 100 euros per ton of CO2 was exceeded on Tuesday. The leading EU Allowance contract briefly peaked at 101,25 euros. A milestone reflecting the increased price factories and power plants have to pay when they pollute.
The European Union intends to reduce CO2 emissions to 55% below 1990 levels by 2030, and, therefore, introduced the emission allowance system in 2005 as one of the most important weapons to encourage the industry, the energy sector, and airlines to opt for ‘green’ choices.
Companies have a particular number of emission rights. As soon as they emit more emissions than they have rights to, they can buy additional allowances. But on the other hand, they can earn money from the extra emission rights they sell if they emit less.
For a long time, the emission rights cost less than 30 euros per ton of CO2, but since 2020, prices increased gradually. Today, for the first time since their introduction, they exceed 100 euros.
Now that the symbolic limit of 100 euros per ton has been passed, it will become more expensive for companies if they pollute too much. The more emitters have to pay to cover each ton of C02 they produce, the greater the incentive to invest in low-carbon technologies and switch to less polluting fuels. According to experts, this could be the turning point.
Due to the energy crisis caused by the Russian war in Ukraine, the EU member states reduced their gas consumption by an average of 19,3% since last summer. That is more than the 15% saving target Europe had set.
Majority scored better
Most member states, 22 of 27, scored better than the 15% target: Finland (-57,3%), Lithuania (-47,9%), and Sweden (-40,2%) saved the most, while Slovakia (+4,6%), Malta (+11,9%) registered an increase of their gas consumption. Three countries, including Belgium, landed right on the 15% target.
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