(Montel) EU ETS emissions totalled 1.679bn tonnes in 2018, down 73m tonnes, or 4.2%, from the previous year, according to preliminary data published by the European Commission on Monday and analysed by Refinitiv.
A poll of analysts indicated a year-on-year decline of 3.1% of verified EU ETS emissions for 2018, Montel reported last week.
Power and heat emissions totalled 893m tonnes, down 61m tonnes, or 6.4% lower year on year.
“Rapid growth in renewable deployment across Europe continues to squeeze out coal in the power sector, putting emissions on a sustained downward path,” said Yan Qin, analyst at Refinitiv.
The trebling of carbon prices in 2018 also triggered fuel switching, further reducing emissions, Qin said.
“With an average carbon price of EUR 16/t in 2018, switching from coal-fired to gas-fired generation led to a 20m tonne decrease in emissions,” she said.
Improved hydrological conditions in southern Europe also contributed to the decline in thermal generation, said market participants.
Emissions from industry fell by 12m tonnes, or 1.5%, to 786m tonnes, Refinitiv said.
“The decline took place against the backdrop of EU GDP growing 1.9% last year,” said the firm’s lead carbon analyst Ingvild Sorhus.
‘’Strong economic growth led to robust industrial activity, with the cement sector seeing the largest growth.”
However, the slight decline in industrial emissions showed that a decrease in carbon intensity had outweighed the effects of increased output, she added.
“The surge in carbon prices might also have played a role here,” said Sorhus. “The cement, lime and glass sector was the only sector to post an increase in emissions last year.”
The Dec 19 EUA contract was last seen down EUR 0.16 at EUR 21.38/t.