Record fall in EU ETS-covered emissions in 2020

Greenhouse gas (GHG) emissions from stationary installations covered by the EU emissions trading system (ETS) are projected to have fallen by the largest amount last year since the launch of the carbon market, according to provisional data released by the European Commission this week.

The commission reported 2020 verified emissions from installations under the EU ETS, excluding the aviation sector, of 1.303bn t of CO2 equivalent (CO2e).

But some facilities have yet to report output for the year and actual GHG emissions are projected at 1.367bn t CO2e, once all data are available, down by 163mn t CO2e, or 10.7pc, from 1.53bn t CO2e in 2019. This estimate uses 2019 figures for installations that reported output for that year but are yet to do so for 2020.

And when aviation is included, total 2020 emissions are projected at 1.396bn t CO2e, down by 12.7pc from 1.598bn t CO2e in 2019.

The data show the largest fall in emissions since the full launch of the EU ETS in 2008 — even exceeding the drop recorded in 2009 following the previous year's financial crash — and the third consecutive annual decline, after a small rise was recorded in 2017.

The biggest driver of last year's fall in emissions was the Covid-19 pandemic, which prompted governments to impose lockdown measures. This forced much of the region's industry to a halt throughout large periods of the year, while many people worked from home and domestic and international travel declined.

Higher installed renewable capacity and increased coal-to-gas switching also contributed to a sharp fall in power-sector emissions.

Stationary installation emissions fell in 28 of the 31 countries covered by the EU ETS last year. The scheme includes the 27 EU member states, plus the UK, Norway, Iceland and Liechtenstein. In 2019, six of the 31 countries had reported a rise in emissions.

All of the five largest-emitting countries in the carbon market — Germany, Poland, Italy, the UK and Spain — reported their lowest annual EU ETS emissions since the full launch of the scheme.

Spain delivered the largest proportional reduction of the group and the third largest of any country — a projected 18.7pc, or 20.5mn t CO2e. Germany, the largest emitter, delivered a projected 11.7pc fall, Italy 10.3pc, and the UK 9.9pc. ETS emissions in Poland, the second-largest emitter, declined by 4.9pc.

The largest reduction of any country was reported by Estonia, where emissions fell by a projected 33.8pc, followed by Greece with a drop of 21.5pc.

Emissions from Belgium, Austria, Croatia and Luxembourg all decreased in 2020, after having risen in 2019.

But Malta and Lithuania recorded a second consecutive annual rise in their emissions, by 9.6pc and 1.2pc, respectively. Malta's emissions were the country's highest since 2015, while Lithuania's were its highest since 2017.

And Liechtenstein's emissions rose by 49pc in 2020, after having fallen in the previous year.

Power sector leads fall Combustion of fuels — most of which occurs in power generation — comfortably remained the largest source of GHG emissions covered by the EU ETS in 2020, comprising 58.3pc of projected total output for stationary installations, at 796.8mn t CO2e. But this was down from 913.4mn t CO2e in 2019, so the sector made up more than 71pc of the total decline in 2020.

Manufacturing and industrial sectors also recorded a sharp drop in emissions. Output from oil refining fell by a projected 9.54mn t CO2e to 113.6mn t CO2e, the largest decline for the sector since the full launch of the ETS.

Combined emissions from the manufacture of ceramics, glass, mineral wool and paper or pulp fell by 3.36mn t CO2e to 57.6mn t CO2e, the steepest fall since 2009.

And emissions reported from cement clinker production fell by 5.98mn t CO2e to 115.8mn t CO2e, the sector's largest decline since 2012.

Emissions from production of pig iron or steel also dropped by 11.2mn t CO2e to 92.3mn t CO2e last year, the biggest fall in the sector since 2009.

But despite this overall decrease, Austrian producer Voestalpine's Stahl Linz steel plant moved into the top 10 emitting installations. The other nine are all lignite or hard coal-fired power plants located in Germany and Poland. Emissions from the top five of these plants fell by almost one-fifth last year.

Ammonia bucked the trend, with emissions from its production rising by around 290,000 t CO2e in 2020 to 21mn t CO2e, following on from an increase of roughly 95,000 t CO2e in 2019.

Aviation emissions halt rise Aviation activities covered by the EU ETS are estimated to have emitted just 28.9mn t CO2e in 2020, down by 39.3mn t CO2e from 68.2mn t CO2e in 2019.

This marks the first time in seven years that aviation emissions under the scheme have declined, and wipes out a cumulative rise of 14.7mn t CO2e between 2014-19. Only flights that take off and land within the European Economic Area are covered by the system.

The European Commission is expected on 4 May to publish data identifying the number of ETS allowances surrendered for each installation to cover 2020 GHG emissions.

By Victoria Hatherick

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