The price of benchmark European Union Allowance (EUA) has reached €50/t, the highest EU carbon price since the European Union Emission Trading Scheme (EU ETS) was launched in 2005. The Benchmark December 2021 price has increased by around 50% since early 2021, in a context of strengthened EU climate policies and rising demand from financial investors anticipating a further price increase. New EU policies aimed to cut emissions across all sectors by 2030 and to reform the EU carbon market are expected to boost the demand for CO2 emission permits, raise their scarcity and spur prices.
The European Commission plans to extend the EU ETS to buildings and transports. Greenhouse gas (GHG) emissions from operators covered by the EU ETS fell by 13.3% in 2020, due to an 11.2% decrease in emissions from stationary installations (power plants and manufacturing plants) to 1.331 MtCO2eq and a 64.1% decrease in emissions from aviation, a sector which was severely impacted by the COVID-19 pandemic, to 24.5 MtCO2eq. The power sector posted a 14.9% decrease, while emissions from industry decreased by an average of 7%.
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