EU ETS Emissions Fell 15.5% in 2023

Stationary installations obliged to participate in the European carbon markets saw their emissions decline by 15.5% in 2023, in line with market expectations, data published by the EC showed.

• The largest driver for the decline were EU ETS emissions from power generation that declined by 24% on the year in 2023. This is due to higher renewables output, the recovery in nuclear generation and better hydropower conditions.
• Industrial emissions from energy intensive sector declined by around 7% on the year due to reduced output and efficiency gains.
• Aviation emissions, in contrast, rose by 10% on the year amid a rebound in flight activity after the pandemic.
• ICIS estimated emissions amounted to 1,097m tonnes last year from roughly 10,000 power plants (-24% to 506.3m tonnes) and factories (-8% to 590.4m tonnes) obliged to participate in the scheme, ICIS senior carbon analyst Lewis Unstead told Montel. This excludes the aviation sector and UK emissions.
• This compares to around 1,313m tonnes produced by the equivalent sample of emitters in 2022.
• “All in all, the published data are in line with expectations and should therefore not cause any major price reaction,” said Pact Capital senior carbon analyst Bernadett Papp.
• Analysts polled by Montel last week were expecting a 14% fall in emissions last year.
• The Dec 24 EUA contract closed on Wednesday at €57.55/t on Ice Endex, after dropping to €56.90/t earlier in the session, the lowest since 14 March.