The EU is making progress in limiting carbon emissions. Analyst agency Wattsight predicts that the total emission level from the sectors that take part in the EU ETS scheme will drop 135 million tons, equaling 8 %, in 2019. The total power demand in Europe will meanwhile fall by 2 % if Wattsight’s estimates turn out correct.
The European carbon price has increased sharply over the last couple of years, and for most of 2019, the price level has been between 25 and 30 EUR/t. The high price has affected the European power mix. Demand for coal has decreased during the year in favor of the less polluting gas. This means that the carbon market to some extend has started to have the effect which the EU politicians hoped for, to provide power producers with incentive to move away from coal power.
Other topics have influenced the development as well. The European economy is not doing well, and both the UK and Germany is heading for recession. A weakening economy means less production and less consumption, and is therefore reflected in the emission levels. It is first and foremost the US-China trade war which is to blame for the economic pressure which several European countries face at the moment.
The official ambition of the EU is that emissions by 2030 should be lowered by 40 % compared to the level of 1990. The union’s member states are working independently working on solutions to switch to greener energy sources.
The cold weather has taken hold, and there were sideways or slightly climbing prices in the forward market last week. Prices are high in the spot market, and this is affecting the long-term contracts in the market.