With the EU power sector increasingly under pressure to decarbonise, a new report by enterprise sustainability data services provider GRESB has revealed which countries and companies in the EU power sector are leading the transition, and which are going in the wrong direction. (GRESB was formerly known as the ‘Global Real Estate Sustainability Benchmark’, but its remit has since increased.)

According to the analysis, the top 100 carbon emitters in the EU power sector are responsible for approximately 62% of total emissions (363mn tCO₂e). They generate just over 1,529 TWh of electricity, accounting for 60% of the total.  

By 2030, the share of emissions from the 100 largest emitters is forecast to fall by around 5.5% to 58% of total emissions. Their share of power generation is expected to fall to 56%, a reduction of nearly 7%. This trend suggests a gradual yet noticeable decentralisation of both generation and emissions, with the former proceeding more quickly, according to the report.  

The rate of reduction is even more pronounced among the top 20 emitters, which are projected to see absolute emissions decline by 46% on average between 2024 and 2030, with a total expected decline of 38% by 2030, compared to 32% across all EU power plants.

While these projections are promising, the report notes that they are not yet on track for the zero electricity emissions by 2035 required by the IEA’s Net Zero Emissions by 2050 scenario. In the six years from 2024 to 2030, total emissions are projected to decline by about 5% per year, but they will need to decline more than twice as fast (about 11%/y) to reach zero by 2035.

The analysis has also found that one-third of EU power plant emissions are linked to companies located in Germany, Italy, Poland or France. Yet there is a large degree of disparity between average emissions intensities. Companies domiciled in France release just 60 gCO₂e/kWh on average, primarily due to the French nuclear fleet and ownership of low-carbon assets in other EU countries. While the average emissions intensities of companies domiciled in the other three countries are much higher: about 260 gCO₂e/kWh in Italy, 250 gCO₂e/kWh in Germany and 770 gCO₂e/kWh in Poland.

According to GRESB, one of the most ‘striking insights’ from the analysis is that many of the ultimate parent companies are not companies at all, but governments. Weighted by their equity share in the underlying companies that directly own power plants, the largest portfolios of power generating assets in the EU are overwhelmingly held by national governments through their direct or indirect interests in state-owned enterprises and their stakes in private firms.

Among the 20 largest generators, 85% of power generation is ultimately attributable to national governments, with local governments owning a further 3%. The remaining 12% of generation (by the 20 largest owners) is ultimately attributable to a handful of non-governmental corporations – Iberdrola and Acciona (Spain), UPM (Finland) and Energetický a Průmyslový Holding (Czechia).

Nearly all the national governments within the top 20 generators will produce most of their electricity in 2024 from low-carbon sources. The carbon-intensive exceptions are Poland (82% coal, 7% gas), Germany (36% coal, 54% gas) and Ireland (21% coal, 48% gas). Among the others, capital-intensive but low-emissions hydro and nuclear power play a major role in EU generation owned by the governments of France (87%), Sweden (65%), Finland (83%), Czechia (65%), Bulgaria (100%), Romania (79%), Austria (83%), China (51%) and Hungary (97%).  

Non-hydro renewable power – primarily solar and wind but including biogas and biomass – is only a major contributor to the portfolios of four governments: Sweden (17%), Denmark (77%), China (29%) and Ireland (21%).

The report finds that the largest generators are not necessarily the largest emitters, highlighting that strategic investments in low-carbon technologies can substantially reduce emissions irrespective of the overall volume of power generated. For example, the 100% state-owned EDF leverages its extensive nuclear fleet to achieve a carbon intensity of about 50 gCO₂e/kWh – substantially lower than the EU average of 230 gCO₂e/kWh.  

According to the findings, despite significant investments in renewables, top generators will still struggle to phase out coal by 2030. Coal is set to remain entrenched in government-owned power generation portfolios, notably Poland and Germany.

Looking at the evolving technology mix of the top emitters explains why many of the biggest generators remain high emitters despite an overall switch away from coal and nuclear towards gas, hydro, and non-hydro renewables between 2024 and 2030. Among government owners for example, Poland is switching away from coal (representing 80% of its generation in 2024 to 55% in 2030) towards gas and non-hydro renewables (from 13% in 2024 to 40% in 2030). Czechia is replacing nuclear and coal (from 81% in 2024 to 66% in 2030) with hydro, gas and non-hydro renewables (19% to 34%). Germany is switching from coal (36% to 22%) to gas (54% to 62%), making up the difference with hydro (9% to 13%).

The report concludes that the lagging phase-out of coal by 2030, reliance on natural gas as a bridge fuel, and an insufficient expansion of renewables are major and persistent barriers to climate objectives. The report suggests that governments should exert additional direct pressure on the companies they control in the power sector to accelerate decarbonisation efforts.