European carbon prices hit record high after German price floor pledge

LONDON (Reuters) -The benchmark European carbon contract hit a fresh record high of 73.18 euros a tonne on Wednesday after Germany’s incoming coalition government said it would prevent carbon prices in its country from falling below 60 euros/tonne.

Germany, which is Europe’s biggest emitter of carbon dioxide, said it would implement the measure if the European Union cannot agree on a minimum price in its Emissions Trading System.

The benchmark December 2021 contract was trading at 72.85 euros/MWh at 15.04 GMT, up 5.4% from Tuesday’s close.

The EU’s Emissions Trading System (ETS), which forces manufacturers, power companies and airlines to pay for each tonne of carbon dioxide they emit, is central to EU efforts to cut net greenhouse gas emissions by 55% from 1990 levels by 2030.

Previous efforts by some member states such as France, to implement a minimum price in the scheme have failed to gain support among all member states.

Proponents of a price floor argue it would help give companies greater confidence to invest in low carbon technology while those who are opposed, such as heavy coal using countries fear it could place too great a burden on their industries.

(Reporting By Susanna Twidale;Editing by Elaine Hardcastle)