Â
"If you think we're permanently going above 100 [euro carbon prices], then that's a very constructive environment for green hydrogen," Lewis said, though he added that CO2 prices could fall back below that level because of bearish factors.
BY KATE ABNETT AND SUSANNA TWIDALE BRUSSELS/LONDON Feb 21 (Reuters) - Europe's carbon price hit a record 100 euros ($106) per tonne on Tuesday, a long-awaited milestone that boosts the economic case for some green technologies and hits industry with its largest bill yet for carbon dioxide emissions.
The European Union has pledged to cut its emissions by 55% by 2030 versus 1990 levels. One of its main tools to make that happen is its carbon market, which requires European industry and power plants to buy permits to cover their CO2 emissions.
Benchmark EU carbon permit prices hit 100 euros per tonne of CO2 on Tuesday, the highest since the scheme launched in 2005.
Incentivising green investments is the scheme's aim. If the carbon permit price is higher than the investment cost of a green technology, then companies will be motivated to choose the investment.
At current levels, CO2 prices provide a strong incentive to invest in green technologies to cut the use of fossil fuels, the price of which surged last year and remains relatively high, Mark Lewis, head of climate research at Andurand Capital, said.
Green hydrogen, produced using renewable energy is seen as important for decarbonising industries including steelmaking. Most hydrogen is currently produced using gas, which emits CO2 but is cheaper than the electricity-based method.
"If you think we're permanently going above 100 [euro carbon prices], then that's a very constructive environment for green hydrogen," Lewis said, though he added that CO2 prices could fall back below that level because of bearish factors.