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EU Carbon Price Crosses Symbolic Threshold

Updated: Mar 23, 2023

The price of carbon in the European Union has risen above 100 euros ($106) per metric ton of emissions for the first time, becoming a price that experts say could accelerate more carbon reduction measures by polluting industries.

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Carbon is priced per metric ton, and a higher price means a higher incentive to cut emissions. The carbon price is part of the EU’s Emissions Trading System, which sets an annually declining cap on the amount of allowable carbon dioxide emissions for a swath of polluting industries in the EU. Within the cap, all manufacturing facilities, power plants, airlines, and other major emitters are required to buy tradable emissions allowances.

The EU’s carbon price oscillates from month to month, but it’s been on an upward trajectory since 2020, when EU lawmakers implemented new rules to accelerate the bloc’s decarbonization efforts. At some points that year, carbon cost less than 20 euros ($21) per metric ton, compared to the all-time high of 101 euros ($107) that was reached last Tuesday.

To achieve bloc-wide carbon neutrality by 2050, EU lawmakers plan to continue allowing the carbon price to rise in order to continually and relentlessly force polluting industries to clean up their act.


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