Report24 October 2018Updated one month ago

Carbon prices: The drivers, the winners and the losers

What's supporting the carbon price and how are European utilities responding as they come under increasing pressure to roll out more renewable capacity?

Executive summary

In the past few years, the questions around CO2 emission reductions and renewable energy development have dominated the European Utilities' sector. With Utilities’ capital expenditure increasingly dedicated to the ongoing roll-out of renewable capacity, the theme will be strongly present in the coming years. European energy companies will continue to be pressed to eliminate their most polluting energy generation technologies.

In this report, we look at what's driving the carbon price and note how a recent price rally has put some strain on European utilities which are heavily exposed to a high carbon dioxide power generation mix. But there are also a number of companies benefiting from the high carbon price thanks to their low CO2 emissions. 

We look at what could drive up the EU carbon price, not least power consumption and political pressure. But demand for electric vehicles and Brexit are two things that could drive that price down.

This report is a condensed version of the original which you may be able to view in the European Credit section of our Research Website.