The price of EU carbon certificates rose above the 50-euro mark for the first time on Tuesday amid a tightening of the bloc’s climate policy and strong investor demand, Reuters reports.

The reference prices for carbon permits in the European Union rose 1.3% on Tuesday morning to 50.05 euros per tonne, the highest level since 2005, when the Emissions Trading Scheme (ETS) was launched. It is the EU’s main policy tool for reducing greenhouse gas emissions, forcing European power plants, factories and airlines to buy such expensive certificates, while the ceiling on the number of tradable certificates falls with each year, according to Agerpres.

The European Commission will propose a major ETS reform in June, given the EU’s goal of achieving climate neutrality by 2050, plus the intermediate target of reducing pollutant emissions by at least 55% by 2030, compared to 1990 levels.

Subsequently, the reference prices of carbon permits in the European Union decreased and traded at 49.46 euro per tonne. According to Refinitiv data, carbon permit contracts for December 2021 rose 14.7% in April and 49.2% since the beginning of the year.

Last month, the price of carbon in the EU rose to a record 47 euro per tonne, following the agreement on the European Climate Law, one of the key elements of the European Green Deal.