The price of permits on the European Union (EU) Emissions Trading Scheme (ETS) has reached €18 (£16) per tonne, triple its cost a year ago and marking a 10-year high.

Around 12,000 power stations and factories use the ETS, on which the price of permits has normally sat at around €5 per tonne.

The price has risen ahead of EU reforms, which will remove some of the over-supply of permits from the system.

Warmer weather – which has promoted increased electricity generation for air conditioning and fans – has also stoked the increase.

No switch from coal to renewables yet

Mark Lewis, Head of Research at the Carbon Tracker think tank, told The Guardian newspaper, that the price would need to rise to around €30 per tonne to trigger switches from coal to gas and renewables.

“I don’t think we are at the stage yet where the carbon price will have a major effect,” he said.

Sandrine Ferrand, a Market Analyst at Engie Global Markets, agreed: “So far, the carbon price is not high enough to trigger a large switch from coal-fired power generation to less polluting gas-fired power generation.”

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