A senior London commodity hedge fund manager is forecasting coal demand in Europe will collapse within three years, betting that the price of EU carbon emission allowances will soar to levels that force power stations to close across the continent. Per Lekander, who manages more than $1.1bn at Lansdowne Partners in Mayfair, told the Financial Times that coal demand would fall close to “zero” if carbon allowances hit €50 a tonne, a level he is betting on them reaching as climate change moves up the political agenda. “My projection for coal becoming less than 5 per cent [of European power supply] is three to four years because once you get a €50 carbon price it shuts down,” Mr Lekander said. “Investors are increasingly starting to realise that climate change is not a political thing, it’s real. And if it is real then you need to drastically reduce the use of fossil fuels. And that is going to happen. It could go even faster. I think it will be basically zero.” His comments come after Glencore, the world’s largest exporter of seaborne coal, announced this week that it was capping its production of the fuel, all but ruling out further expansion of its coal mines.
FT 22nd Feb 2019 read more »