Banks decide shares to profit from ETS worth rally


Behind a drained carp basin, water vapor rises from the cooling towers of the Jänschwalde lignite power station of Lausitz Energie Bergbau AG (LEAG) into the cloudy autumn sky.

Patrick Pleul | Image Alliance | Getty Images

Europe has the world’s largest emissions trading system – and prices have risen. Analysts expect this record rally to continue and have picked the stocks most likely to benefit from the trend.

The European Union limits the carbon emissions of many companies, and excess allowances can be bought and sold. The reference carbon price was 51.75 euros per ton on Monday, close to the 56 euros it had reached at the beginning of this month – the highest level since its market launch in 2005.

The rapid increase in the contract of around 20 euros before the coronavirus pandemic is likely to be supported by Europe’s more ambitious climate policy and increased financial investments in the market. Looking to the future, the experts are optimistic and some support a price-end-target of more than double the current level.

Here analysts from Berenberg, Deutsche Bank, Barclays and Morgan Stanley name some of the stocks that suggest outperformance due to this burgeoning trend.

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