| The European carbon market is likely to remain oversupplied until 2027 even if the EU adopts stricter emissions reduction targets, analysts have warned. Thomson Reuters Point Carbon says the 2.5 billion excess carbon credits likely to be in the emissions trading scheme (EU ETS) in 2020 will not be fully eroded until allowance prices start to rise dramatically in the mid-2020s.
Prices in the market are currently around €5.5 per tonne of CO2, which is well below the €40/t level most analysts agree is needed to drive large-scale low carbon investment. And prices will average only around €7.7/t between now and 2020, according to Point Carbon, when the return of around 900 million allowances likely to be temporarily removed from the market may force prices down to a little as €5/t.............................................Full Article: Source
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