* EU CO2 permits trade as high as 50.05 euros per tonne
* Boosted by new EU climate goals, investor demand
* Analysts say price needs to be much higher to speed change (Adds graphics, Eurofer comments)
By Kate Abnett, Susanna Twidale and Nora Buli
May 4 (Reuters) - The European Union carbon price hit a record high of above 50 euros per tonne on Tuesday, a key milestone in what analysts say is likely a long-term climb towards the price levels needed to trigger investments in innovative clean technologies.
The EU carbon market is the bloc's main tool for curbing greenhouse gas emissions that cause climate change, forcing power plants, industry and airlines running flights within Europe to buy permits when they pollute.
With the bloc striving to meet tougher climate goals - including a new target to cut net greenhouse gas emissions by at least 55% by 2030 - the market has found more impetus.
The benchmark EU Allowance (EUA) price hit 50.05 euros a tonne on Tuesday, the highest since the carbon market launched in 2005. The benchmark December 2021 contract has soared around 50% since the beginning of the year.
"There's a basket of bullish factors, that is really why we see prices up at these levels," Refinitiv analyst Ingvild Sorhus told Reuters.
These include policy support from the EU's new climate goal, plus increased permit demand from financial investors tempted into the market by soaring prices and a consensus among analysts that prices are likely to climb further in the coming years.
Brussels will this summer present a package of policies to slash emissions across all sectors to meet the 2030 target, including reforms to the EU carbon market. That is expected to lead to greater demand for CO2 permits and to make them more scarce.
Analysts say the EU carbon price now needs to rise to levels high enough to trigger CO2 cuts in industry, where low-carbon alternatives cannot yet compete on cost with traditional fossil-fuel based technologies.
"The carbon price has to reach high enough to enable the European Union to reach net zero by 2050," said Mark Lewis, chief sustainability strategist at BNP Paribas, referring to the bloc's long-term goal to eliminate its net emissions by 2050.
That would require a CO2 price high enough to make hydrogen fuel produced from renewable energy competitive with hydrogen produced from fossil fuels, Lewis said.
"On this basis, I think around 90 euros a tonne is a reasonable expectation by 2030."
Emissions from power plants and industry covered by the EU carbon market plunged by 35% from 2005 to 2019.
So far, most of those cuts have come from the power sector, as higher CO2 prices have helped make coal-fuelled power plants uneconomical, triggering a switch from coal to gas, which emits less CO2.
"We've done the easy bit, which is the coal to gas switch in the power sector," said Berenberg analyst Lawson Steele, who expects the EU carbon price to more than double by the end of this year. "Industry now needs to step up and do their bit."
Most revenues from the EU carbon market are redirected back to national governments, meaning countries are armed with swelling resources to invest in cutting CO2 emissions.
To help European companies stay competitive as they face higher carbon costs, Brussels plans to introduce a carbon border tariff on imports of polluting goods from abroad.
That is not expected to come into force for another few years, and some industries say higher CO2 costs are already squeezing their ability to find cash to invest in carbon-cutting technologies.
"The increasing price to record levels presents a set of problems," said Charles de Lusignan, a spokesman for steel industry association Eurofer.
"One is our global competitors do not have those carbon constraints . The second is makes it much more difficult to invest in the new technologies that will be needed to make the low carbon transition possible," he said.
(Reporting by Nora Buli in Oslo, Kate Abnett in Brussels and Susanna Twidale in London. Editing by Jane Merriman, Mark Potter and Bernadette Baum)
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