5.1.2.1.3 CO2 emission quota prices
The price of CO2 emission quotas for delivery in December Y+1 stood at an average €82.8/t for 2022, a very substantial increase over 2021 (+53.4% or +€28.8/t).
Early in the year, the war in Ukraine caused high volatility in prices. As gas supplies from Russia diminished, many European States considered making greater use of coal, and therefore purchased emission quotas. Prices were also influenced by the positions taken by purely financial actors, and this contributed to the volatility of quota prices from the very beginning of the year.
The European agreement signed at the end of the year to reform the CO2 market aims to reduce emission allowances by 62% (compared to 2005) by 2030, as opposed to the 43% reduction in current law. This will lead to a €2 billion decrease in quotas. An agreement was also reached for the gradual phasing out of free emission quota allocations, which will be replaced by the CBAM (Carbon Border Adjustment Mechanism, which aims to address the carbon footprint of imported products).
CO2 emission quota prices in €/t for next-year deliveries in December (ICE) (1)
This graph shows us the evolution of the price of allowances
CO2 emission quota prices in €/t for next-year deliveries in December (ICE) (1)
2021
January : approximately 34
April : approximately 44
July : approximately 53
October : approximately 63
December : approximately 71
2022
January : approximately 74
April : approximately 81
July : approximately 89
October : approximately 67
December : approximately 84
5.1.2.1.4 Fossil fuel prices (2)
| Coal (US$/t) | Oil (US$/bbl) | Natural gas (€/MWhg) | |
|---|---|---|---|
| Average price for 2022 | Average price for 2022 Coal (US$/t)221.7 |
Average price for 2022 Oil (US$/bbl)99.1 |
Average price for 2022 Natural gas (€/MWhg)82.8 |
| Average price variation, 2022/2021 | Average price variation, 2022/2021 Coal (US$/t)+133.8% |
Average price variation, 2022/2021 Oil (US$/bbl)+39.7% |
Average price variation, 2022/2021 Natural gas (€/MWhg)+178.5% |
| Highest price in 2022 | Highest price in 2022 Coal (US$/t)342.4 |
Highest price in 2022 Oil (US$/bbl)128.0 |
Highest price in 2022 Natural gas (€/MWhg)231.5 |
| Lowest price in 2022 | Lowest price in 2022 Coal (US$/t)90.8 |
Lowest price in 2022 Oil (US$/bbl)76.1 |
Lowest price in 2022 Natural gas (€/MWhg)29.4 |
| Price at 31 December 2022 | Price at 31 December 2022 Coal (US$/t)184.5 |
Price at 31 December 2022 Oil (US$/bbl)85.9 |
Price at 31 December 2022 Natural gas (€/MWhg)69.6 |
| Price at 31 December 2021 | Price at 31 December 2021 Coal (US$/t)99.3 |
Price at 31 December 2021 Oil (US$/bbl)77.8 |
Price at 31 December 2021 Natural gas (€/MWhg)50.0 |
Coal prices for next-year delivery in Europe stood at an average $221.7/t in 2022 (+133.8% or +$126.8/t compared to 2021).
This significant increase and the volatility of coal prices are explained by several factors:
the energy crisis since October 2021, especially in the gas market, which led to greater use of coal-fired facilities and lower stocks in Europe;unfavourable weather-related incidents (in Indonesia and Australia) and rail transport difficulties that limited exports (in Australia and South Africa);lower demand in China due to successive lockdowns, offset by energy requirements in India which were driven by national growth and local heatwaves;the European Union embargo on Russian coal from 15 August 2022, decided in early April;the drop in gas supplies from Russia, which led several European countries to take measures to restart coal-fired electricity generation.
However, coal prices declined at the end of the year as coal stocks in European ports reached near-record levels.
(1) Average ICE prices for the annual contract, Phase III (2013-2020) and Phase IV (2021-2030).
(2) Coal: average ICE prices for delivery in Europe (CIF ARA) for the next calendar year (US$/t); Oil: ICE price for Brent crude oil barrel (front month)
(US$/barrel); Natural gas: average ICE OTC prices, for delivery starting from October of the following year in France (PEG Nord – €/MWhg).