The role of speculation during the recent increase in EU emissions allowance prices

Miguel Ampudia, Giovanna Bua, Daniel Kapp and Dilyara Salakhova

Economic Bulletin Boxes, 2022, vol. 3

Abstract: The price of emissions allowances traded on the EU Emissions Trading System (ETS) has risen from below €10 per metric tonne of carbon to above €90 since the beginning of 2018. This box outlines the main reasons behind this increase and examines whether speculative activity may have played a significant role. It concludes that, at present, tangible evidence for a marked increase in speculative activity related to potential changes in market structure appears scarce. Furthermore, a speculation index suggests that, while speculation appears to have increased slightly since early 2019, it remains relatively moderate and well below readings during earlier phases of the ETS. JEL Classification: G12, G14, G38

Keywords: ETS; EU Allowance prices; Price drivers (search for similar items in EconPapers)
Date: 2022-04
Note: 2445760
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Citations: View citations in EconPapers (6)

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