European Union carbon permits surged to a record as speculators bet on stricter policies to meet emission-reduction goals and demand from industrial buyers for the pollution rights.

Carbon futures cleared 41 euros a metric ton for the first time in the EU’s 16-year-old cap-and-trade emissions market, the largest in the world. The contracts have climbed 26% this year, and are up five-fold since 2018.

The carbon market imposes a price on emitting greenhouse gases through tradable allowances, covering almost 12,000 energy-using facilities that are required to surrender the permits to account for their emissions. As the EU ramps up its climate goals, the trading system is central to driving the switch to lesser-polluting technologies.

Carbon futures rose as much as 3% to 41.85 euros ($49.05) per metric ton on Wednesday.

Guest post from Bloomberg