Oversight of the EU carbon market, the world’s biggest, is seen to be working well, according to Polona Gregorin, a European Commission official who’s deputy head of the emissions trading system unit.

After more than 15 years – the carbon market is now mature, she said at the Innovate4climate conference. Commodities and financial regulators in each member state oversee carbon trading.

The market level, which has more than tripled since the beginning of the global pandemic to more than 50 euros a ton, “not only reflects the current supply and demand in allowances, but It’s also a forward-looking market, reacting to political decisions that reflect of course the possible future supply and demand for allowances.”

So the declining carbon cap and tighter supply is now reflected in the price, she said.

The surging prices have led to some calls for market intervention to keep prices lower or curb the activity of speculators.

Gregorin said non-emitting buyers and sellers in the market provided important services, such as risk reduction for all participants; limiting access to the market to only factories, power stations and airlines — those entities covered — could make the market more volatile.

“What is worse for volatility is of course an illiquid market — that would be something that leads to volatility. Without the participants in the market, that could be a risk,” Gregorin said.

(Updates headline)