EU carbon market emissions fell 4.2 % in 2018

4 April 2019

Greenhouse gas emissions from stationary installations regulated under EU’s carbon market decreased by 4.2 % last year to 1679 million tonnes, according to the Carbon research team at Refinitiv. The team analysed verified emission data for 2018 published on 1 April by the European Commission. The verified emissions are in line with the advance estimates from the analysts.

In 2018 EU carbon market emissions resumed the downward trend, dropping by 73 Mt compared to 2017. This was mainly due to the significant drop in power and heat sectors’ emissions. Emissions from industrial manufacturers were only slightly down year on year.

In the power and heat sector 2018 emissions came in at 893 million tonnes, down 61 Mt or 6.4 % year on year. “Rapid growth in renewable deployment across Europe continues to squeeze out coal in the power sector, putting emissions on a sustained downward path”, said Yan Qin, senior modeling analyst at Refinitiv. “Last year’s sharp rally in carbon prices also resulted in fuel switching, reducing emissions further. With the average carbon price of €16/t in 2018, switching from coal-fired to gas-fired generation has led to 20 Mt decrease in emissions.” Improved hydrological conditions in Southern Europe have also contributed to the decline in thermal generation.

 

Emissions from industrial manufacturers decreased by 12 Mt or 1.5 % to 786 Mt. “The decline took place against the backdrop of EU GDP growth at 1.9 % last year.’’ commented Ingvild Sørhus, lead carbon analyst at Refinitiv. ‘’Strong economic growth led to robust industrial activities, with the cement sector seeing the largest growth. But the slight decline in emissions shows that carbon intensity improvement has outweighed the effects of production growth. The surge in carbon prices might also have played a role here.‘’ The cement, lime and glass sector is the only sector posting an increase in emissions last year.

The aviation sector is also regulated under the carbon market, and airlines have to report emissions for all flights that take off from and land at European airports. Aviation sector emissions increased by 5.7 % last year to 68.6 million tonnes. With aviation included, total EU ETS emissions were 1757 million tonnes, down 3.3 % year on year.



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