The price of carbon in Europe has soared to a fresh record high near €38 a tonne, with prices adding more than 13 per cent over the past two sessions as traders rushed to secure supplies of EU emissions allowances.

A 6.8 per cent move on Wednesday followed a 6.5 per cent gain in the previous session, triggered by an auction in Poland that cleared far above the market price.

The gains mark an acceleration in the cost of releasing one tonne of CO2, which has already soared in recent months as the EU has strengthened its commitments to cutting emissions. The price of carbon has climbed by 66 per cent since early November.

“The bulls [are] firmly in charge once more,” said Tom Lord at Redshaw Advisors, a consultancy. Analysts said the strength of the move over Tuesday and Wednesday was likely to be self-fulfilling, as traders who had been betting against the price were forced to scramble to buy back positions.

A growing band of traders, including hedge funds, banks and utilities, have said they expect prices will keep rising as the EU keeps tightening emissions rules — a shift that will over time make alternatives in the renewable energy sector more competitive against fossil fuels.

Under the scheme, heavily polluting industries and power plants are allocated a set number of allowances each year that they can sell if they manage to cut their own emissions, or buy if they pollute more than expected.

Some traders have cautioned that the carbon market risks becoming a one-way bet, and forecast the EU Emissions Trading System price could hit €50 a tonne or higher in the coming years.

A setback could come if Brussels felt compelled to cut costs for businesses, and added more allowances to the market. EU ETS prices can be volatile with prices falling by around 25 per cent between September and November, before the latest rally got under way.

Electricity supplies in Europe have already adjusted since 2017, under pressure from the rally in the EU ETS that pushed prices from near €7 to €30 a tonne.

Analysts have cautioned that the speed of the recent gains may prompt some industrial buyers to step back from the market temporarily in the hope that prices retreat again.

The market went through a decade-long slump after the financial crisis as the slowdown in the global economy naturally reduced emissions, leaving a large surplus of allowances and depressing prices.

The potential for price gains in EU carbon has caught the attention of traders outside the once niche industry. Pierre Andurand, one of the world’s most famous oil hedge fund managers, was revealed by the FT last year to have dipped a toe into the market.

This week, an analyst at his fund told Bloomberg he believed the price of the EU ETS could soar to €100 a tonne this year.