Carbon allowance prices fall below EUR 80/t on cheap natural gas

Carbon allowance prices fell below EUR 80/t yesterday for the first time since mid-January. Analysts contacted by international news service Montel say the main reason for the decline in carbon allowance prices is the falling price of natural gas, which has already dropped below EUR 25/MWh this week. 

The price of the futures contract for delivery of carbon allowances in December this year continued to fall, dipping below EUR 80/t on Thursday, with the closing price that day at EUR 78.7/t. After almost half a year, carbon allowance prices have thus fallen back below EUR 80/t.

Analysts contacted by international news service Montel see the continued decline in natural gas prices as the main factor behind the fall in carbon allowance prices, which were still hovering around EUR 100/t at the beginning of March this year. This week, the price of the futures contract for delivery of natural gas at the TTF trading hub in the coming month fell below EUR 25/MWh.