The price of permits in the European Union’s carbon market closed at a record high above 96 Euro on Friday as analysts forecast the 100-Euro mark to be hit soon and to stay. The European Trading System (ETS) is the main energy-price inflation driver in Europe, a system based on financial derivative bets and a multiplier of a tax on hydrocarbons.
As European energy providers buy energy on the spot market in peak hours, or during low renewable production phases, they must choose between coal or natural gas, both such prices being affected by carbon allowances. This determines the price of electricity as well.
High energy prices are now turning into an economic and social emergency as families and companies start to receive astronomical heating and electricity bills. Food prices are also increasing, slowly but steadily, putting pressure on governments to act.
