European carbon price hit a record high today after Germany announced it may set a floor price of 60 Euros/tonne for emitters over the next few years.
The EU’s Emissions Trading System (ETS) went as high as 73.18 Euros (~$82 USD) per metric ton.
The EU’s ETS forces power companies, manufacturers, and airlines to pay for each tonne of carbon dioxide they emit.
The European Union made the carbon market a central part of its ‘Fit for 55’ package to accelerate pollution cuts this decade. The EU’s goal is to cut net CO2 emissions by 55% from 1990 levels by 2030.
Similar to the UK’s carbon price mechanism, the German decision on carbon prices would create an additional domestic levy. This added charge for emitters in Germany is on top of the price paid in the EU emissions trading system.
Germany is Europe’s largest economy and manufacturing accounts for 23% of Germany’s GDP compared to 11% of the UK’s GDP.
Manufacturing is a high-emitting industry and this significantly makes burning coal less attractive there faster than other EU members.