Relation of CO2 emission allowance prices and electricity prices in Poland in 2013-2020


carbon price pass-through
electricity prices
CO2 prices
Emission Trading System

How to Cite

Bielecki, P. (2023). Relation of CO2 emission allowance prices and electricity prices in Poland in 2013-2020. Economics and Environment, 84(1), 76–95.


This paper investigates the relation between the prices of CO2 emission allowances in the EU ETS (Emission Trading System), and wholesale prices of electricity in Poland. Linear regression models were used to assess carbon price pass-through rate to wholesale electricity prices during the entire III phase of ETS (2013-20). It has been found out that the entire cost of CO2 emission allowances was included in wholesale electricity price. As expected, the peak transmission parameter is higher than the off-peak one. Nevertheless the difference is small, and statistically insignificant, hence the model does not allow for any far-reaching conclusions in this regard. Results show, that electricity producers were able to pass the entire emission related costs to the customers, which might rise a question whether EU ETS is an effective tool to give sufficient incentives to decarbonise electricity production.


Bonacina, M., & Gulli, F. (2007). Electricity pricing under „carbon emission trading”: A dominant firm with competitive fringe model. Energy Policy, 35(8), 4200-4220.

Castagneto-Gissey, G. (2014). How competitive are EU electricity markets? An assessment of ETS Phase II. Energy Policy, 73, 278-297.

Chernyavs'ka, L., & Gulli, F. (2008). Marginal CO2 cost pass-through under imperfect competition in power markets. Ecological Economics, 68(1-2), 408-421.

Dagoumas, A. S., & Polemis, M. L. (2020). Carbon pass-through in the electricity sector: An econometric analysis. Energy Economics, 86, 104621.

Huisman, R., & Kilic, M. (2015). Time variation in European carbon pass-through rates in electricity future prices. Energy Policy, 86, 239-249.

Jouvet, P., & Solier, B. (2013). An overview of CO2 cost pass-through to electricity prices in Europe. Energy Policy, 61, 1370-1376.

Kara, M., Syri, S., Lehtilä, A., Helynen, S., Kekkonen, V., Ruska, M., & Forsström, J. (2008). The impacts of EU CO2 emissions trading on electricity markets and electricity consumers in Finland. Energy Economics, 30(2), 193-211.

Kim, W., Chattopadhyay, D., & Park, J. (2010). Impact of carbon cost on wholesale electricity price: A note on price pass-through issues. Energy, 35(8), 3441-3448.

Pereira Freitas, C. J., & Pereira da Silva, P. (2015). European Union emissions trading scheme impact on Spanish electricity price during phase II and phase III implementation. Utilities Policy, 33, 54-62.

Sjim, J., Bakken, S., & Chen, Y. (2005). CO2 price dynamics: The implications of EU emission trading for the price of electricity. Netherlands.

Sijm, J., Neuhoff, K., & Chen, Y. (2006). CO2 cost pass-through and windfall profits in the power sector. Climat Policy, 6(1), 49-72.

Wang, M., & Zhou, P. (2017). Does emission permit allocation affect CO2 cost pass-through? A theoretical analysis. Energy Economics, 66, 140-146.

Woo, C. K., Olson, A., Chen, Y., Moore, J., Schlag, N., Ong, A., & Ho, T. (2017). Does California’s CO2 price affect wholesale electricity prices in the Western USA? Energy Policy, 110, 9-19.

Creative Commons License

This work is licensed under a Creative Commons Attribution-ShareAlike 4.0 International License.

Copyright (c) 2023 Economics and Environment


Download data is not yet available.