A sluggish economy has caused European carbon emissions to drop 3.1%, according to latest analysis from Thomson Reuters Point Carbon.
During 2013, approximately 1915 million t of greenhouse gases were emitted from stationary installations in the 28 countries that participate in the European Union’s Emissions Trading Scheme (EU ETS), and Norway.
Companies in Europe produced approximately 3.1% less carbon dioxide (CO2) compared to 2012 according to estimates by Thomson Reuters Point Carbon, comparing the emissions of all stationary installations included in the ETS in 2012 with the numbers released today by the European Commission.
European power consumption
“The drop in last year’s emissions is mainly a result of dwindling power consumption across Europe against the backdrop of sluggish economic growth,” explained Emil Dimantchev, analyst at Thomson Reuters Point Carbon. The change in emissions compared to last year remains uncertain however, as the inclusion of new sectors has caused difficulties assessing the Verified Emissions data.
Reported emissions for 2014 include emissions from new sectors and installations which joined the EU ETS in 2013. The ETS now caps the emissions of approximately 1400 new installations as a result of the expansion of the scope of the system.
“The enhanced breadth of the ETS harmonises the system’s coverage across member states and creates incentives for emission reductions in more economic sectors, and greenhouse gases beyond CO2”, added Dimantchev.
EU ETS emissions
The scope of the EU ETS was extended to new industrial sectors and gases as of 2013 including installations in the aluminum and petrochemical sector. These newly added installations emitted 97 million t in 2013, according to estimates by Thomson Reuters Point Carbon. Although installations in the EU’s newest member state Croatia, which also joined the EU ETS in 2013, have not yet reported emissions, Thomson Reuters Point Carbon estimates that these installations produced 8 million t in 2013.
Emissions from the 27 EU ETS participants (excluding Croatia) and Norway’s power and heat producers dropped by 4.7% in 2013. “This is the largest drop in power emissions since the 2008 financial crisis; driven largely by a slump in power consumption,” explained Yan Qin, senior analyst at Thomson Reuters Point Carbon.
The combination of slow growth in economic activity, implementation of energy saving measures and a mild winter dampened power demand in 2013. Qin concluded: ‘’Emissions then declined as stable renewable and nuclear power generation squeezed out coal- and gas-fired power plants. If coal power plants hadn’t been running at the current high levels across Europe, emissions would have been even lower”.
Refineries and cement producers
In 2013, emissions related to industrial activity dropped by 2 million t to 709 million t, falling 0.4% compared to the year before. “Despite contracting production levels in a number of sectors, industry emissions remained stable, possibly due to changes in emissions intensity across Europe”, explained Dimantchev. The drop in output from refineries and cement producers were the most pronounced, with production dropping by 5% and 3% in 2013 respectively.
Carbon market oversupply
The oversupply in the carbon market continued to grow last year, as the 2013 verified emissions fell below the emissions cap for the fifth consecutive year. Approximately 2128 million allowances were supplied to the market for 2013 through auctions, free allocation, or sales by the European Investment Bank which was commissioned to sell 300 million allowances to raise capital for clean energy projects, estimates Thomson Reuters Point Carbon.
Dimantchev added: “Therefore, the oversupply grew by 213 million t this year, adding up to around 2 billion allowances accumulated surplus, not accounting for additional credit usage”.
Only 5% of the airlines covered under the EU ETS reported emissions for 2013. “The haphazard reporting of aviation emissions this year should not be surprising due to the continuous regulatory uncertainty for airlines operators”, explained Dimantchev. Airlines are obligated under current legislation to report emissions from flights within Europe as well as intercontinental flights. The Parliament is however scheduled to vote on 3 April on a proposal which will require airlines to comply only for emissions within Europe, and to report 2013 emissions in 2015, leaving the aviation sector with uncertainty which reporting rules to follow.
Source: Thomson Reuters Point Carbon.
Adapted from press release by Katie Woodward
Read the article online at: https://www.worldcoal.com/power/01042014/european_carbon_emissions_fall_677/