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Back You are here: Home Business Carbon Market E.U.’s emissions decline, surplus of allowances grows

Carbon Market

E.U.’s emissions decline, surplus of allowances grows

Emissions from stationary installations – such as power plants and manufacturing facilities – participating in the European Union’s Emissions Trading System declined by 2 percent last year to 1.897 billion tons of carbon dioxide equivalent, found the Union Registry.

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“The good news is that emissions declined again in 2012,” said Climate Action Commissioner Connie Hedegaard. “The bad news is that the supply-demand imbalance has further worsened in large part due to a record use of international credits. At the start of phase 3, we see a surplus of almost two billion allowances. These facts underline the need for the European Parliament and Council to act swiftly on back-loading.”

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The E.U. E.T.S. has also recorded verified emissions from airlines of 84 million tons. Aircraft operators accounting for more than 98 percent of last year’s aviation emissions covered by the E.U. E.T.S. have undertaken necessary steps to comply with the regulation.

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Consistent with the provisions halting the trading scheme (see related story), aircraft operators could limit their flights in 2012 within Europe only, in which they could also take further step by May 27 to return free allocations for flights outside Europe.

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The Union registry also noted that in 2012, companies’ level of compliance with the trading scheming was again high. Less than one percent of the participating installations did not surrender allowances covering all their emissions by the deadline of 30 April 2013. These installations are on average small and together account for less than one percent of emissions covered by the E.U. E.T.S.

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Allowance surplus by the end of last year stood at nearly two billion, compared with some 950 million surplus at the end of 2011. The increase is largely attributed to a combination of the use of international credits, auctioned phase 2 allowances and outstanding allowances in the new applicant reserve, sales of phase 3 allowances to generate funds for the renewable energy demonstration projects under the program (see related story) and early auctioning of phase 3 allowances.

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The E.U. E.T.S., launched in 2005, is dubbed as the “cornerstone” of the European policy to mitigate climate change and a key tool for easing industrial greenhouse gas emissions in a cost-efficient way. Covering more than 11 000 power plants and industrial plants in 31 countries, the emissions trading scheme is also hailed as the first and by far the biggest mechanism of its kind in the world. – EcoSeed Staff

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