Europe carbon price hits new record

European carbon prices surged Thursday to a record peak, one day after Germany’s new coalition government indicated it could set a floor for the market.

Just before midday, prices hit an all-time pinnacle at 74.39 euros per tonne, extending Wednesday’s record-breaking run.

Carbon trading, a key way to prevent climate change, involves companies buying the right to pollute from others who have a lower carbon footprint.

Germany’s centre-left SPD, Greens and liberal FDP presented their plans on Wednesday for the eurozone member nation’s next ruling coalition.

Climate protection features prominently in the coalition accord, with the Greens getting their way on bringing Germany’s exit from coal forward to 2030 from 2038.

“The carbon price … was boosted by the coalition deal agreed between the SPD, Greens and FDP parties in Germany, which will give high priority to carbon pricing,” noted Commerzbank analyst Barbara Lambrecht.

“The coalition intends to campaign for a minimum price in the EU. If no agreement can be reached at EU level, national measures … are to ensure a carbon price of 60 euros.”