EU Emissions Down Just 0.4% in 2015

Emissions of greenhouse gases from installations participating in the EU Emissions Trading System (EU ETS) are estimated to have decreased by just under 0.4% last year, according to the information recorded in the Union Registry, published May 20 by the European Commission.

It said the surplus of emission allowances that has built up in the system since 2009 was considerably reduced last year as a result of "back-loading", which postponed the auctioning of 300mn allowances from 2015 to 2019-2020, combined with stable emissions.

EU Climate Action and Energy Commissioner Miguel Arias Canete said: "The good news is that the EU ETS emissions dropped slightly last year, which confirms the decreasing trend over the last five years. Also, 2015 marks the first year in which the surplus shrank considerably on the European carbon market – thanks to the back-loading of allowances. This shows that our efforts to address the serious market imbalance start to bear fruit. But back-loading is just the beginning. The Market Stability Reserve will need to complete the work."

The Market Stability Reserve will start operating in less than 32 months – January 2019 – and will address the current surplus of allowances.

Tradable EU emissions permits (EUAs) are currently trading at about €6/metric ton of CO2, down from around €8 in January 2016. They were sub-€6 in October 2014 but climbed steadily from €7 in May 2015 until this January. Weak economies worldwide and low EU electricity prices have kept a cap on such carbon prices so far this year. Also generators in Europe now have more economic incentive to burn gas than coal than they did in 2014-15, and several coal-fired plants have closed for good in the past year especially in Britain.

Mark Smedley