By Mathew Carr

Dec. 28, 2020 (LONDON) — EU carbon prices rose to their highest ever ahead of a period of freezing weather across much of Europe early next week. Natural gas contracts surged.

EU December 2021 allowances advanced as high as 33.50 euros a ton and were up 2.5% at 32.98 euros at 1pm in London, according to data from the website of the ICE Futures Europe exchange. (The price might have been even higher as the data provided on the website does not include every trade.)

The gain also followed the striking of a Brexit trade deal Dec. 24.

See this snip for cold weather coming up and click the link for a weather loop from WeatherOnline:

Front-month (Jan. 2021) Dutch natural gas jumped to 19.425 euros per MWh, its highest in more than a year.

Higher carbon prices make it more expensive to burn coal and lignite for power, spurring utilities to prefer gas where possible. Coal generators need about double the carbon allowances compared with those burning gas.

For Brexit trade deal carbon and climate story: http://carrzee.org/2020/12/25/u-k-eu-disputes-on-climate-to-be-governed-by-bespoke-panel-of-experts-after-brexit/

(Updates Monday afternoon to add natural gas surging too.)