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Bloomberg
Permits for European Union carbon emissions rose above 30 euros ($34) a ton for the first time since 2006 as the bloc works to enact a sweeping overhaul to cut greenhouse-gas emissions. Carbon futures climbed despite an overall gloomy economic outlook and with pollution set to fall to the lowest level in decades this year.
While actual emissions plunge this year, the price of permits has been seen to rise as speculative buyers bet on political efforts to cut pollution that could rely in part on the carbon trading system. Investors have also been cutting short positions in recent weeks after a record buildup in the bets started in March.
The EU has proposed a 750-billion-euro package to help economies recover from the
fallout of the coronavirus. The Commission may make funds available only to projects that are in sync with the EU’s climate-neutrality objective.
While rumours have swirled in the market that the buildup is driven by hedge funds and algorithmic traders, it’s also possible that companies that actually emit carbon and need the permits are buying them up ahead of the EU’s moves to tackle the climate crisis.