LONDON (Reuters) - The turnover in global emissions trading hit a record high last year of $214 billion as prices rose on current or expected stricter regulation, research by Refinitiv showed on Friday.

FILE PHOTO: The Allianz Tower, the Libeskind Tower and the Generali Tower are pictured amidst dense fog and smog in Milan, Italy, January 8, 2020. REUTERS/Flavio Lo Scalzo/File Photo

The turnover was up 34% from a year earlier and marked a third consecutive year of growth.

The world’s largest carbon market, the EU’s Emissions Trading System (ETS), makes up of almost 80% of traded volume. The average price of carbon permits in the scheme rose by $10 last year to $28 a tonne.

The main reason for the increase in prices was a mechanism which came into effect in January last year, designed to withhold a significant amount of permits and tighten supply.

The European Commission’s “green deal” policy package, which was announced in December, will commit the European Union to achieve climate neutrality, emitting no more greenhouse gases beyond what can be absorbed, by 2050.

The Commission also intends to propose more ambitious targets to cut emissions by 2030 by the middle of this year.

Both of these moves also lent support to EU carbon prices, Refinitiv said.

Emissions trading schemes, or carbon markets, are market-based tools to limit greenhouse gas emissions. They put a cap on the amount countries or companies can emit and if they exceed the limit they can buy permits from others.

While a global carbon market remains elusive, 46 nations and over 30 cities, states and regions now have a price on carbon dioxide emissions (CO2), covering just over 20% annual global greenhouse gas emissions, according to World Bank data.

The two regional carbon markets in North America - the Western Climate Initiative and the Regional Greenhouse Gas Initiative - saw turnover surge by 74% to $24 billion last year, due to expectations of tighter supply in 2021, Refinitiv said.

The world’s biggest emitter, China, will start a national emissions trading scheme this year. Meanwhile, the country’s eight pilot schemes had turnover of $301 million, up 40% from last year.