The top five highest-emitting countries in sectors covered by the EU emissions trading system (ETS) all recorded their lowest stationary emissions since the full launch of the scheme in 2008 last year, provisional data published by the European Commission this week indicate.
Top emitter Germany recorded both the largest actual and proportional fall of the five, with the country's ETS-covered emissions declining by a projected 62.9mn t of CO2 equivalent (CO2e), or 18pc, to 291mn t CO2e, according to Argus calculations which use 2022 figures for installations that reported output for that year but have yet to do so for 2023.
The second-highest emitter, Poland, recorded the second-largest actual fall of the group of 23.6mn t CO2e to 160.5mn t CO2e, although this constituted a smaller 13pc proportional drop compared with the remaining three.
Italy, Spain and France are all projected to have recorded declines of roughly 16pc in their ETS-covered emissions on the year. Italy's emissions fell by 21.2mn t CO2e to 155.1mn t CO2e, Spain's by 15mn t CO2e to 81.3mn t CO2e and France's by 13.8mn t CO2e to 71.2mn t CO2e.
Power sector emissions tumble
As was the case for overall EU ETS stationary emissions for the year, a large portion of the decline in these countries' emissions resulted from a sharp fall in emissions from combustion of fuels, which primarily takes place in the power sector.
German fuel combustion emissions are projected to have fallen by 21pc in 2023 to a record low of 191.5mn t CO2e. The fall in power sector emissions occurred despite the phase-out of nuclear capacity in Germany, with the final units closing in April last year, which might have been expected to boost the call on other thermal assets.
But lower overall power demand and higher renewable capacity limited the share of coal and gas in the generation mix, while improved hydropower and nuclear availability in the wider region reduced pressure on domestic production.
And of the fossil fuel-fired assets that did operate, lower gas prices drove a switch from coal to gas plants, further reducing the carbon intensity of the generation mix. German day-ahead clean spark spreads for a 55pc-efficient gas plant averaged minus €0.98/MWh in 2023, Argus data show, against day-ahead clean dark spreads for a 40pc-efficient coal plant of minus €9.57/MWh.
In 2022, by contrast, equivalent dark spreads stood comfortably above spark spreads at €92.32/MWh compared with €7.59/MWh, and both averaged out in positive territory compared with the negative spreads of 2023.
Polish emissions from fuel combustion fell by a projected 14pc to 123.9mn t CO2e, Italy's by 21pc to 72mn t CO2e, Spain's by 24pc to 36.5mn t CO2e and France's by 23pc to 36.8mn t CO2e, marking the lowest such emissions for each country since the full launch of the scheme.
Industrial activity lags
Industrial emissions also declined in the five countries last year to record lows in many cases.
The bloc's manufacturing production was down by 1.6pc compared with 2022, according to preliminary data from statistics unit Eurostat published last month, while the commission also pointed to efficiency gains as one reason for lower industrial emissions.
Emissions from cement clinker production, one of the most carbon-intensive industrial sectors covered by the ETS, declined in all five countries, which constitute the top-five emitters in the sector.
Germany's clinker production emissions dropped by a projected 14pc, Poland's by about 13pc and France's about 12pc, while Italian and Spanish emissions from the sector declined more slowly at about 4pc and 3pc, respectively. Emissions fell to record lows in all countries except Poland, which recorded its lowest emissions from the sector since 2016.
The countries also posted a varied extent of decline in emissions from the production of pig iron or steel. France, the fourth-highest emitter for the sector, posted a projected fall of 15pc, while fifth-highest emitter Spain's emissions fell by 10pc.
But Germany, the highest emitter in the sector, saw its pig iron and steel emissions edge down by just 0.4pc. Third-highest emitter Italy's fell by 4pc and Poland's 2pc.
These marked record lows in France, Italy and Poland. But German and Spanish emissions from the sector had fallen lower in 2020 at a time of the Covid-19 pandemic.
European steel association Eurofer earlier this year attributed its estimated fall in steel consumption in 2023 to "ongoing conflicts, uncertainty surrounding energy prices and high inflation[…] combined with a worsened economic outlook".
