Emissions trading: 2013 data show lower emissions but surplus of allowances persists
15 May 2014 10:44 AM
Emissions of greenhouse
gases from installations participating in the EU Emissions Trading System (EU
ETS) are estimated to have decreased by at least 3% last year, according to the
information recorded in the Union Registry.
Climate Action Commissioner
Connie Hedegaard said: "The good news is that emissions declined
faster than in previous years even as Europe’s economies started to
recover from the recession. However, there is still a growing surplus of
emission allowances that risks undermining the orderly functioning of the
carbon market. The Commission has taken action to address this with the already
adopted back-loading measure. But as this is only a temporary measure, the
Commission has proposed to establish a market stability reserve. Now it is up
to the European Parliament and the Council to take it forward and move ahead
swiftly in their discussions. "
2013 emissions
decline
The EU ETS covers more than
12 000 power plants and manufacturing installations in the 28 EU member
states, Iceland, Norway and Liechtenstein, as well as emissions from airlines
flying between European airports. Last year marked the start of the third ETS
trading period (phase 3), which runs until 2020.
Verified emissions of greenhouse
gases from stationary installations amounted to 1895 million tonnes of
CO2-equivalent in 2013. Although there are some methodological challenges in
assessing with certainty the change in emissions compared to 2012 due to the
extension in scope of the EU ETS for the third trading period, estimated
emissions in 2013 on a like-for-like basis were at least 3% below the 2012
level for installations in sectors included in both the second and third
trading period. Emissions additionally covered by the EU ETS due to the
extension of its scope are estimated at 79 to 100 million
tonnes.
Allowance surplus growing
again
The cumulative surplus in
emission allowances increased further to more than 2.1 billion for the 2013
compliance year from almost two billion at the end of 2012. The 2013 figure
takes into account the exchange of international credits into allowances, sales
of phase 3 allowances to generate funds for the NER300 programme to support
innovative low-carbon technologies, allowances allocated for 2013 and
auctioning of phase 3 allowances in 2013. It is expected that in 2014 the
surplus will start to shrink as the implementation of back-loading has started
in the first quarter of 2014.
High level of
compliance
Companies' level of
compliance with the EU ETS rules was again high. Less than 1% of the
installations which have reported emissions for 2013 did not surrender
allowances covering all their emissions by the deadline of 30 April 2014. These
installations are typically small and together account for less than 1% of
emissions covered by the EU ETS. For this first reporting year of the third
trading period, about 3% of stationary installations subject to compliance
obligations in 2013 did not report their emissions by 30 April 2014, according
to registry data.
Exchanges of international
credits
Since 2013, credits gained from
investment in emission-reduction projects undertaken in third countries can no
longer be directly surrendered for ETS compliance but must be exchanged into
allowances.
Of the 132.8 million credits
that were exchanged for allowances by 30 April 2014, 50% were Certified
Emission Reductions (CERs)1 and 50% Emission
Reduction Units (ERUs).2 The origin of these CERs
and ERUs was from a limited number of countries, with 80% of CERs originating
from China and nearly 5% from India, and 70% of ERUs from Ukraine and 25% from
Russia.
See Annex for full details. More
information on the number and type of credits exchanged by 30 April 2014, by
country of origin and project, is available at here.
Reporting and compliance for
2013 aviation emissions to take place by 2015
The 2013 data do not cover
aviation emissions since aircraft operators are not required to report 2013
emissions for flights within the European Economic Area until 31 March 2015, or
surrender the corresponding volume of allowances until 30 April 2015. The
deadlines have been extended under a recent amendment of the EU ETS Directive
which takes account of the intended implementation by 2020 of an
international agreement applying a single global market-based measure to
aviation emissions.
Background
Under the EU ETS, installations
are required to submit their verified emissions data for each year to Member
State registries. For 2013, this data became publicly available on the European
Union Transaction Log (EUTL) on 2 April 2014. From 15 May, the EUTL also
displays compliance data, with information on whether installations have
complied with their obligation to surrender an amount of allowances equal to
last year's verified emissions.
The third trading period of the
EU ETS began on 1 January 2013 and runs for eight years until 31 December 2020.
The legislation reforming the EU ETS, laying down revised rules until 2020 and
beyond, was adopted as part of the EU climate and energy package on 23 April
2009 (see IP/09/628).
In January 2014
the Commission proposed legislation to establish a market
stability reserve at the beginning of the next ETS trading period in 2021. The
reserve would both address the surplus of emission allowances that has
built up and improve the system's resilience to major shocks
by adjusting the supply of allowances to be auctioned (see IP/14/54).
For more
information:
EU Transaction Log
homepage: http://ec.europa.eu/environment/ets/
Registries homepage of DG
Climate Action on EUROPA:
http://ec.europa.eu/clima/policies/ets/registry/index_en.htm
span>
Revised ETS and Frequently Asked
Questions:
http://ec.europa.eu/clima/policies/ets/registry/faq_en.htm
Aviation:
http://ec.europa.eu/clima/policies/transport/aviation/index_en.htm
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