Greenhouse gas (GHG) emissions from sectors covered under the EU Emissions Trading System (EU ETS) declined by 5% in 2024, marking a major milestone—a 50% reduction since the system was launched in 2005, according to a new report published by the European Commission.
The ETS, the EU’s flagship carbon pricing mechanism, targets high-emission sectors including electricity and heat generation, oil refining, steel, cement, chemicals, paper, and aviation. Since its establishment, the system has proven instrumental in decarbonizing these industries by setting a cap on emissions and enabling market-based trading of emission allowances.
Following regulatory updates in 2023, the scope of the EU ETS was expanded and its targets tightened. The system now requires steeper emission reductions and includes new sectors under its purview. Between 2020 and 2030, the EU ETS is projected to generate approximately €40 billion in revenues, which are earmarked to support climate and energy projects.
Power Sector Leads the Way
The power sector was the largest contributor to the emissions drop in 2024, with a 12% decrease in electricity-related emissions. This was largely driven by a shift in the energy mix, including:
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An 8% increase in electricity generation from renewables
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A 5% increase from nuclear energy
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An 8% decline in gas-fired electricity
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A 15% drop in coal-based power generation
Within renewables, solar energy surged 19%, hydropower output rose, while wind power remained stable due to weather variability.
Mixed Results by Sector
Sector-specific results varied:
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Cement sector emissions declined by 5%, aligned with lower production levels
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Fertilizer industry emissions increased 7%, also reflecting production trends
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Aviation emissions saw a 15% rise, highlighting the sector’s rebound amid growing travel demand
With 2024 data now available, the EU’s emissions trading policy continues to demonstrate its central role in meeting climate targets—both in reducing emissions and supporting the broader energy transition across Europe.
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