(Updates with detail, comment)
LONDON, Nov 25 (Reuters) – The benchmark European carbon price hit a fresh record on Thursday afternoon, touching 75.04 euros a tonne.
Prices were extending gains from Wednesday, having risen after Germany’s incoming coalition government said it would prevent carbon prices in its country from falling below 60 euros a tonne, traders said.
“The general fundamental picture remains tight due to the high gas prices, but the gains last week and this week were driven by technicals and sentiment,” said Florian Rothenberg, EU power and carbon markets analyst at ICIS.
High gas prices make it more economical for power companies to burn coal, which emits twice the amount of carbon dioxide as gas power plants, requiring more carbon permits.
Some traders have also said progress on the role of carbon markets at international climate talks in Glasgow earlier this month had boosted confidence in their use to meet climate goals, further adding to the bullish sentiment. (Reporting by Susanna Twidale; Editing by Jan Harvey)