Idea of carbon price ‘corridor’ resurfaces in France

(EurActiv, 12 May 2022) The recent surge in CO2 prices on the EU carbon market has revived the idea of introducing a “price corridor”, with a maximum and a minimum, in order to ensure greater market stability. EURACTIV France reports.

The EU emissions trading scheme, in place since 2005, applies to industrial companies across the bloc, of which 1,000 are in France.

For many years, prices remained below €10 per tonne of CO2 emitted. But in 2018, prices began increasing, on the back of more ambitious EU climate policies and a tightening cap on emissions.

By December last year, prices reached €80 per tonne before reaching a peak of nearly €100 in February.

Power utilities, who are major consumers of CO2 allowances, were quick to feel the pinch.

“Recently, a Polish electricity supplier explained to me that carbon allowances accounted for 60% of its costs,” said Sébastien Postic, head of the Public Finance, Development and Climate project at the Institute for Climate Economics.

We are witnessing “a turning point in the dynamics of the carbon price,” added Marc Baudry, head of the CO2 Price and Low-Carbon Innovation programme at the Climate Economics Chair of Paris Dauphine University.

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EurActiv, 12 May 2022: Idea of carbon price ‘corridor’ resurfaces in France