(Bloomberg) -- European electricity producers are snapping up coal cargoes as a shortage of natural gas forces utilities to burn the dirtiest of fossil fuels.

A shipment for delivery next month at a major European hub traded at $200 a metric ton, the highest since 2008, according to traders who saw the transaction on the globalCOAL platform. Several utilities stepped into the market this week to secure supplies before the start of the winter, said the traders, who asked not to be identified because the deals are private.

Europe is facing an energy crunch after a long and cold winter left gas stockpiles depleted. Replenishing them hasn’t been easy, with limited supplies from Russia and Norway forcing Europe to fight for cargoes of liquefied natural gas in the spot market. Low wind speeds have compounded the continent’s energy woes, prompting utilities to turn to dirtier fossil fuels to bridge the shortfall.

“We are observing some tightness also in the coal market,” Marco Saalfrank, head of continental Europe merchant trading at Axpo Solutions AG, said in an interview at the Gastech conference in Dubai this week. Profits for coal-fired power plants have “turned positive, increasing the production.” 

Energy prices are soaring just as Europe is trying to push for a more ambitious climate deal when world leaders meet in Scotland later this year. Coal’s comeback is likely to make those talks difficult for politicians from the U.K. to Spain and Italy, which are already dealing with the fear of voter backlash from rising energy bills.

The cargo of 50,000 metric tons that changed hands on Friday was for delivery in the Amsterdam-Rotterdam-Antwerp hub, traders said. And it’s not only spot prices that are rising, futures for next-year delivery also surged as much as 4.1% to $139 a ton, the highest since 2008. Rising demand from utilities is depleting stockpiles at European ports.

Coal supplies have fallen as major producers Colombia and Indonesia have struggled with heavy rain, while some mines elsewhere have closed because of the pandemic. Investment in new mining projects has almost come to a halt in recent years, with banks cutting lending to coal companies as the world seeks to avert the worst effects of climate change.

“Gas supply is short, coal supply is short and renewables aren’t going great and we are now in this crazy situation, it’s the only way we can describe it,” Dale Hazelton, head of thermal coal at Wood Mackenzie, said by phone from Singapore last week.

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