The cost to polluters in Europe crossed €100 per permit on Tuesday for the first time. This has been driven by increased burning of coal, low gas prices and an April deadline for companies to balance their carbon books.

For Ireland, this may mean a slow return to lower electricity prices as the country still relies strongly on coal-burning Moneypoint power station for a lot of supply when the wind isn’t blowing.

Policymakers are unlikely to do anything to reduce the price of carbon on EU markets as the high cost is seen as a strong incentive for companies who are the biggest emitters to reduce their output.

A level at or above €100/t is seen as important for alternative technologies such as green hydrogen, which could become economically competitive when compared to other carbon fuels as it needs zero offset.

It is likely that the carbon credit market will be increasingly important in Europe as both countries and companies will have to put their hands deeper into their pockets to meet ever-tighter EU rules.