Brussels, 16 May 2013
Emissions trading: 2012 saw continuing decline in emissions but growing surplus of allowances
Emissions of greenhouse gases from installations participating in the EU Emissions Trading System (EU ETS) decreased by 2% last year, according to the information recorded in the Union Registry.
Climate Action Commissioner Connie Hedegaard said: "The good news is that emissions declined again in 2012. 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."
2012 emissions data
The EU ETS covers more than 12 000 power plants and manufacturing installations in the 27 EU member states, Norway and Liechtenstein and also, from 2012, emissions from airlines flying between airports in these countries and to closely connected areas. Verified emissions of greenhouse gases from stationary installations1 have continued to fall, dropping to 1 867 million tonnes of CO2-equivalent last year, about 2% below the 2011 level for installations Verified emissions reported by airlines amount to almost 84 million tonnes.
High level of compliance from installations
Companies' level of compliance with the EU ETS rules was again high. Less than 1% of the participating installations did not surrender allowances covering all their 2012 emissions by the deadline of 30 April 2013. These installations are typically small and together account for less than 1% of emissions covered by the EU ETS.
First year of emissions responsibility for aircraft operators
Aircraft operators responsible for over 98% of the 2012 aviation emissions covered by the EU ETS have successfully taken the necessary steps to date to comply with the EU ETS legislation. In accordance with the provisions of the "stop the clock" Decision2, aircraft operators may limit their responsibility for 2012 to flights within Europe only, in which case they may also take a further step by 27 May to return free allocations for flights outside Europe.
All cases of non-compliance will be examined by the competent authorities of the responsible Member States in accordance with established procedures.
Allowance surplus has doubled in 2012
At the end of 2011, the allowance surplus was some 950 million. A combination of the use of international credits, auctioned phase 2 allowances and remaining allowances in the new entrant reserve, sales of phase 3 allowances to generate funds for the NER300 programme and early auctioning of phase 3 allowances, has delivered a cumulative surplus of almost two billion allowances by the end of 2012.
Under the EU ETS, installations are required to submit their verified emissions data for each year to Member State registries. For 2012, this data became publicly available on the European Union Transaction Log (EUTL) on 2 April. From 15 May, the EUTL 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.
The second trading period of the EU ETS began on 1 January 2008 and ran for five years until 31 December 2012. This period coincided with the period during which industrialised countries must meet their Kyoto Protocol emission targets. The EU ETS has been substantially reformed for the third trading period, which started on 1 January 2013 and will 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 EU ETS after 2012 until 2020 and beyond.
For more information:
The CITL homepage: http://ec.europa.eu/environment/ets/
The registries homepage of DG Climate Action on EUROPA:
The revised ETS and Frequently Asked Questions:
Aviation and the 'stop the clock' Decision:
Summary of allocation and verified emissions
Greatly increased use of international credits
Since 2008, the EU ETS legislation has allowed installations to surrender international emission reduction credits generated through the Kyoto Protocol’s flexible mechanisms in order to offset a part of their emissions.
In 2012, the highest ever number – over 500 million – of international credits was used for compliance in the EU ETS. This is 26% of the total amount of surrenders in 2012 and includes a record number of ERUs
The combined CER3 and ERU surrenders since 2008 have used some 75% of the approximately 1.4 billion credit quota allowed over the 2008-2012 trading period.
CERs have accounted for 6.9 % of all surrenders since 2008. Cumulatively, the EU ETS has been responsible for the use of 670 million CERs, of which 63% from projects in China and 16% from India.
ERUs have accounted for 3.9% of all surrenders between 2008 and 2012. A total of 378 million ERUs have been used in the EU ETS since 2008. In view of the forthcoming restrictions, 285 million ERUs were handed in for 2012 emissions, which is more than 14% of total surrenders in 2012.
Installations in Cyprus and Liechtenstein have not reported verified emissions for 2011 yet.
Emission-saving projects undertaken through the Kyoto Protocol's Clean Development Mechanism (CDM) generate credits known as Certified Emission Reductions (CERs).
This includes 2.5 million aviation allowances were offered at auction by Germany in the course of 2012.