• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 2 days Does Toyota Know Something That We Don’t?
  • 5 days OPINION: Putin’s Genocidal Myth A scholarly treatise on the thousands of years of Ukrainian history. RCW
  • 2 days World could get rid of Putin and Russia but nobody is bold enough
  • 22 hours America should go after China but it should be done in a wise way.
  • 5 days CHINA Economy IMPLODING - Fastest Price Fall in 14 Years & Stock Market Crashes to 5 Year Low
  • 4 days China is using Chinese Names of Cities on their Border with Russia.
  • 5 days Russian Officials Voice Concerns About Chinese-Funded Rail Line
  • 4 days CHINA Economy Disaster - Employee Shortages, Retirement Age, Birth Rate & Ageing Population
  • 10 days huge-deposit-of-natural-hydrogen-gas-detected-deep-in-albanian-mine
  • 5 days Putin and Xi Bet on the Global South
  • 5 days "(Another) Putin Critic 'Falls' Out Of Window, Dies"
  • 6 days United States LNG Exports Reach Third Place
  • 6 days Biden's $2 trillion Plan for Insfrastructure and Jobs

Carbon Prices Set To Fall As Europe Speeds Up Energy Transition

Hedge fund manager Per Lekander, who has been historically bullish on carbon prices, is betting that carbon credit prices will drop as Europe accelerates the energy transition.

“I see coal and gas prices falling, and I think they are going to go way lower in the longer term. And the emissions market is going to collapse,” Lekander told the Financial Times in an interview published on Tuesday.

Lekander was a carbon credit market bull for years and cashed in on the price rally in 2018.

Now the longer-term prospects of the carbon credits market are not so rosy amid a faster than previously thought shift away from fossil fuels and into renewables.

Earlier this year, the European Union member states and the European Parliament reached a political agreement to raise the targeted share of renewable energy in the EU’s energy consumption to 42.5% by 2030, up from a current target of 32%. The provisional political agreement – part of the EU’s efforts to ditch Russian energy as soon as possible and become a net-zero bloc by 2050 – will have to be endorsed by both the EU Council and the European Parliament to become law.    

The European Union’s Emissions Trading System [EU ETS] is a cornerstone of the EU’s policy to fight climate change and a key tool for reducing greenhouse gas emissions cost-effectively. The EU is the world's first major carbon market and remains the biggest one.

As Europe looks to lower emissions, the carbon credit prices are set for a decline, according to Lekander, who is managing partner at the investing group Clean Energy Transition.

Earlier this year, the carbon prices in the EU ETS hit a record $112 (100 euros) per ton, before falling to around $95 (85 euros) a ton currently.

The current carbon price is a massive 430% higher compared to five years ago, per FT’s estimates.

Lekander considers to close out his short position if carbon prices dropped to $67.50 (60 euros) per ton, he told FT.


By Tsvetana Paraskova for Oilprice.com

More Top Reads From Oilprice.com:

Join the discussion | Back to homepage

Leave a comment

Leave a comment

EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News