News

Coal Prices Suddenly Fly, Carried Away by Soaring Gas

– 14 June 2024

Description

In mid-2024, global energy markets were shaken when coal prices suddenly spiked, largely as a knock-on effect from soaring natural gas prices. In Indonesia and beyond, the surge highlighted how tightly interlinked commodity markets are, and how disturbances in one fuel segment can cascade across the energy mix.

For companies navigating the evolving landscape of carbon markets, such volatility holds crucial lessons. When coal becomes more expensive, utilities and industries may shift toward gas, biomass, or other alternatives, each with distinct CO₂ emission profiles. These shifts impact carbon allowance demand, the cost of compliance with systems like the EU ETS, and the risk exposures of energy portfolios.

In this article, we’ll explore:

  • What drove the recent surge in coal prices and how gas markets contributed
  • The implications for fuel switching, emissions, and carbon pricing
  • How energy-intensive businesses can manage volatility in commodity and carbon markets
  • What strategic steps to take to build resilience in an increasingly uncertain energy environment

 

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