EU ETS emissions down 4.5% – Point Carbon

Emissions accounted for by the European Union Emissions Trading Scheme (EU ETS) were down 4.5% in 2014, compared to 2013, according to the Point Carbon team at Thomson Reuters.

 The market analysts attribute the drop in 2014, the first year since 2008 that annual emissions exceeded the allocation of allowances (due to backloading), to mild weather curbing power consumption.

According to Point Carbon, in 2014 around 1,822mn tonnes (Mt) of carbon dioxide were emitted from stationary installations in the 31 countries that participate in the ETS. Looking in more detail at the 4.5% drop, power sector emissions fell significantly and were 7% lower year-on-year.

‘2014 was the warmest year on record. The mild winter weather curbed power consumption and contributed to a decline of 40 Mt in emissions,’ said Yan Qin, Senior Carbon Analyst at Thomson Reuters. ‘Emissions intensity dipped further as renewables play a larger role in the power mix.’

The EU ETS has been suffering over recent years and is routinely criticised for its over-allocation of emission permits and low carbon prices. The European Parliament has voted to create a ‘market stability reserve’ at the beginning of the next trading period in 2021 to take permits out of the system and boost the carbon price (see the April issue of Energy World).