EU carbon price nears €40 as speculators move in

The surge in trading cannot be explained by fundamental demand from utilities

European carbon prices have rocketed to new highs in early February, extending a rally that has seen prices add more than 70pc since the start of November last year. A surge in buying from speculative investors is seen as the main catalyst, as high fuel prices have capped profits for power generation and damped demand from utilities. EU emissions allowances (EUAs) have now exceeded even the most optimistic price forecasts for 2021, as the number of investment funds and other financial entities with long positions has risen to its highest ever. More than 375 separate financial entities are identified as holding positions in EUAs on ICE Futures, the leading carbon derivatives exchange. At leas