What moved the price
EU carbon prices popped to their strongest level since late January, with the December contract hitting €87.75 a metric ton on Monday after an intraday gain of up to 2.6% on the ICE Endex exchange.
Why coal is back in play
When gas prices jump, coal often becomes the cheaper option for power producers. Europe is refilling thin gas inventories ahead of winter, while liquefied natural gas flows from Qatar remain limited because of the Iran war. That backdrop has made coal more profitable, pushing utilities to burn more of it and buy additional permits to cover the extra emissions.
The mechanics that keep prices up
In the EU, power plants and other industrial users must surrender one carbon permit for every metric ton of CO2 they emit. As Ingvild Sorhus, a carbon specialist at Oslo-based analysis firm Veyt, put it, "Coal is in the money all the way with high prices." She added, "We see at least with prices we have now that coal is favored over gas." Sorhus also pointed out that the month's end brings a compliance cutoff for last year's emissions, which is drawing in extra buyers and propping up prices.
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What this means for your portfolio
If you own or track heavy emitters, pricier permits flow straight into operating costs and can change which plants run. With prices back near late January levels and a month‑end emissions accounting deadline pulling demand forward, carbon costs are likely to stay front and center for European energy and industrial names.
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