European carbon prices could hit €100 this winter as Iran war drives up gas costs
BusinessLine 1 hr ago·23 Oct 2026, 7:27 am
European carbon prices are climbing sharply as the ongoing conflict in the Middle East disrupts global energy supplies. This geopolitical tension has driven up the cost of natural gas, which is the primary fuel used to generate electricity in Europe. Since carbon permits are priced based on the cost of electricity generation, higher gas prices are forcing power companies to pay more for the right to emit greenhouse gases.
For investors, this surge in carbon costs signals a significant shift in the region's energy economics. It highlights how volatile energy markets can directly impact the pricing of environmental assets. While the broader market is affected, this trend underscores the growing link between traditional energy security and the evolving carbon market.
Looking ahead, traders will closely watch how high gas prices sustain these carbon levels. Any further escalation in the Iran conflict or a sudden drop in energy demand could alter the market's trajectory. Investors should monitor these energy supply dynamics to understand the potential volatility in carbon pricing going forward.
Excerpt from BusinessLine
European carbon prices could rise to €100 (USD 112.12) per metric tonne this winter as high natural gas prices linked to the Iran war encourage power generators to increase coal use, pushing up emissions, according to a report by BofA Global Research. The report said the energy supply shock had driven global prices to…Read the original at BusinessLine
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