Europe’s carbon price nears 100- euro milestone

The price of permits in the European Union's carbon market closed at a record high above 96 euros on Friday, with analysts expecting the symbolic 100 euro level could soon be breached.

Known as the EU emissions trading system (ETS), Europe's carbon market compels factories, power plants and airlines to pay for each tonne of CO2 they emit - the higher the permit price, the greater the cost of producing planet-warming emissions, although some receive free permits to help them stay cost competitive in global markets.

The carbon price has risen more than 200 per cent since the start of 2021, due to factors including soaring gas prices that have also prompted some power generators to switch to coal, resulting in higher emissions and demand for permits.

The benchmark EU carbon permit contract traded as high as 97.50 euros per tonne on Friday before ending the day at 96.43 euros, the highest close since the carbon market launched in 2005.