Feb

18

Emissions from the EU ETS down 3% in 2008

Filed Under Carbon Trading, EU ETS 

The latest analysis from New Carbon Finance suggests emissions from the EU ETS
totalled 2.1Gt CO2 in 2008, down 3% from 2007 levels. Even taking into account
reduced economic output, its analysis indicates that the largest cause of the reduction
is the EU ETS itself encouraging greater use of gas in power generation.
In a report released to its clients, New Carbon Finance estimates the impact of the financial
crisis and ensuing economic recession on emissions from installations covered by the EU
ETS in 2008. The analysis, coming two months before the official release of the data by the
European Commission, underlines the close relationship between economic activity and
emissions of carbon dioxide in the European Union.
Output cuts bring emissions down
Emissions from industrial sectors included in the EU ETS decreased 5% in 2008, and were
driven by the downturn in construction in countries such as Spain and the UK and the severe
crisis affecting manufacturing sectors in the fourth quarter of the year.
Cement was the worst hit by the recession, with output falling 17m tonnes, or 9%, over the
course of 2008. Steel production was also hit by the slowdown in both automotive sales and
the downturn in construction, decreasing 30% in the last quarter to finish the year at -6%. 
Power generation up, CO2 emissions down
Despite total generated electricity increasing 0.3%, CO2 emissions from the power sector fell
2% to reach 1.5Gt CO2 in 2008. This was underpinned by a fall in emissions from power
stations running on coal and lignite as well as a higher recourse to gas for power generation.
Other factors explaining the fall in emissions were an increase in generation from wind and
hydropower, higher nuclear availability in the United Kingdom and Spain and, finally, high
EUA prices throughout most of the year.

Continue reading at New Carbon Finance

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