New EEA briefing on the European Union’s Emissions Trading System

Greenhouse gas emissions from stationary installations covered by the European Union’s Emissions Trading System (ETS) dropped by 9.1% in 2019 from 2018 levels, the largest drop in a decade, according to the latest European Environment Agency (EEA) briefing on trends and projections in the EU ETS released this week.

 

Climate action in Europe: EU ETS emissions see big drop in 2019, latest EEA assessment shows

The EEA briefing ‘The EU Emissions Trading System in 2020: trends and projections’ found that the drop in emissions from facilities covered by the EU ETS was again driven by a strong shift in the fuels used for electricity generation, from coal towards less carbon-intensive energy sources such as gas and renewables. However, emissions from aviation, also covered by the ETS, continued to increase (1 %), reflecting the increasing demand for air travel in 2019.

The observed reduction in emissions between 2018 and 2019 was due to the increased price of CO2, which made coal less attractive, combined with the rising share of renewables in the total energy supply. Many countries also saw a switch from coal to natural gas.

In 2019 the number of EU ETS emission allowances auctioned decreased by 36 % compared to 2018. However, total revenues from auctions increased by EUR 447 million because of higher carbon prices.

Continued decrease in ETS emissions forecast, but more effort needed

EU countries project that their emissions under the trading system will continue to decrease in the coming decade, as per current and planned measures, albeit at a considerably slower pace than historically. However, these projections do not take into account some of the most recently planned measures, reductions already achieved in 2019 or the impact of the COVID-19 pandemic.

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