Emissions trading: EU ETS emissions increased in 2010 but remain well below pre-crisis level

IP/11/581

Brussels, 17 May 2011

Emissions trading: EU ETS emissions increased in 2010 but remain well below pre-crisis level

Emissions of greenhouse gases from businesses participating in the EU Emissions Trading System (EU ETS) increased by over 3% last year, according to the information provided by Member State registries.

Climate Action Commissioner Connie Hedegaard said: "The emissions increase in 2010 reflects the economic recovery, but even after the economy coming back to normal, the EU ETS emissions remain well below the cap for the 2008-2012 trading period. The figures also show that some industrial sectors continue to build up a surplus of allowances to be traded in the third trading period starting in 2013. This highlights the flexibility that emissions trading offers to businesses and also confirms that more can be done to reduce emissions in the next phase at a reasonable economic cost''

2010 emissions data

The EU ETS covers more than 12,000 power plants and manufacturing installations in the 27 EU member states, Norway and Liechtenstein. Verified emissions of greenhouse gases from these installations¹ totalled 1.932 billion tonnes of CO2-equivalent last year, some 3% higher than the 2009 level.

The increase in emissions is in line with widely held expectations and analysts' forecasts ahead of the data release. It can be attributed to the economic recovery following the recession which caused an exceptional 11.6% fall in emissions in 2009.

This increase is however likely to be substantially lower than the rebound in output from the installations concerned given that the average industrial production index in the EU 27 increased by 6.7% in 2010 compared to 2009².

High level of compliance

Companies' level of compliance with the EU ETS rules was high. Only 2% of the installations participating did not surrender allowances covering all their 2010 emissions by the deadline of 30 April 2011. These installations are typically small and together account for less than 2% of emissions covered by the EU ETS. Three per cent of installations failed to submit verified emissions for 2010 by the same deadline.

Increased use of international credits

Since 2008 installations can surrender international emission reduction credits generated through the Kyoto Protocol’s flexible mechanisms in order to offset part of their emissions. CERs³ accounted for 4.7% of all surrenders in 2008-2010. Some 51% of these originated in China, 20% in India, 16% in South Korea and 7% in Brazil, with a further 20 countries of origin accounting for the remaining 6%.

ERUs⁴ have accounted for only 0.4% of all surrenders since 2008. The combined CER and ERU surrenders since 2008 have used up roughly 21% of the approximately 1.4 billion credits that are allowed over the 2008-2012 trading period.

Background

The second trading period of the EU ETS began on 1 January 2008 and runs for five years until 31 December 2012. This period coincides with the period during which industrialised countries must meet their Kyoto Protocol emission targets. The EU ETS will be substantially reformed for the third trading period, which will start on 1 January 2013 and run until 2020. The legislation revising the Emissions Trading Directive was adopted as part of the EU climate and energy package on 23 April 2009 (IP/09/628) laying down revised rules for the ETS after 2012 until 2020 and beyond.

Under the EU ETS, installations are required to submit their verified emissions data for each year to Member State registries. For 2010 this data became publicly available on the Community Independent Transaction Log (CITL) on 1 April 2011. From 16 May onwards the CITL also displays compliance data, with information on whether installations have complied with their obligations to surrender an amount of allowances equal to last year's verified emissions.

Further information:

The CITL homepage

http://ec.europa.eu/environment/ets/

The registries homepage of DG Climate Action on EUROPA

http://ec.europa.eu/environment/climat/emission/citl_en.htm

The revised ETS and Frequently Asked Questions

http://ec.europa.eu/environment/climat/emission/ets_post2012_en.htm

Annex

¹ :

Installations in Cyprus have not reported verified emissions for 2010 yet.

² :

http://epp.eurostat.ec.europa.eu/cache/ITY_PUBLIC/4-14022011-AP/EN/4-14022011-AP-EN.PDF

³ :

Emission-saving projects undertaken through the Kyoto Protocol's Clean Development Mechanism (CDM) generate credits known as Certified Emission Reductions (CERs).

⁴ :

Emission Reduction Units (ERUs) is the name given to credits generated by emission-saving projects undertaken through the Kyoto Protocol's Joint Implementation mechanism

⁵ :

The total CERs and ERUs surrendered for 2010 compliance accounts for 136.978.618 corresponding to 7,1% of the units surrendered for 2010 compliance.