CO2 emissions in EU ETS fell by a record 15.5% last year

Last year’s decline in CO2 emissions from installations covered by the European Union Emissions Trading System (EU ETS) was the largest since its launch in 2005. The power generation sector was the main driver of the decline, recording a year-on-year drop of 24% thanks to a significant decrease in electricity generation from coal and natural gas. This is according to information published on the European Commission’s website.

Data submitted by individual member states as of 2 April 2024 showed a record year-on-year decline of 15.5% in CO2 emissions under the EU ETS, according to the European Commission. As a result, CO2 emissions under the EU ETS are now 47% lower than in 2005, which the Commission says indicates that the 2030 target of a 62% cumulative reduction in emissions is achievable.

“The trend observed demonstrates the effectiveness and efficiency of the European ‘cap and trade’ system as the main tool for decarbonising the European economy,” the European Commission said.

Power generation drove the decline

According to the published data, the power generation sector recorded the largest year-on-year decline in CO2 emissions, with emissions falling by 24%. This reduction was achieved thanks to a significant increase in electricity generation from renewable sources, which led to lower output from coal- and gas-fired power plants. Lower electricity demand also contributed, falling by 3.4% year on year (41 TWh).

Emissions from industrial installations covered by the EU ETS fell by around 7% year on year, according to the published data. The Commission said the decline was due to a combination of lower industrial output and increased energy efficiency, particularly in the cement and steel industries.

Aviation was the only sector covered by the EU ETS to record a year-on-year increase in CO2 emissions. As activity gradually recovered after the collapse caused by the COVID-19 pandemic, the sector’s CO2 emissions rose by around 10% last year.