Factor

EU regulated CO2 emissions down 4% in 2018: preliminary EC data

02 April 2019 | Markets

The figures suggested total CO2 emissions fell to around 1.684 billion mt, down 70 million mt, or 4%, from 1.754 billion mt in 2017.

That would be broadly in line with expectations, but towards the top end of analysts' estimates. Market participants had expected a year-on-year drop of about 3%-4%.

The figures showed verified CO2 emissions from more than 13,000 installations across 31 countries that participate in the EU ETS, providing an indicator of underlying compliance demand from power plants, factories and airlines across Europe in 2018.

Since some plant operators had not reported their figures, as of Monday, the data provided only an indicator of the year-on-year trend in CO2 emissions. The 4% indicative drop was assessed by comparing only plants that reported figures for both 2017 and 2018.

The EC's figures showed underlying demand for carbon allowances, which plant operators must hand over to the EC by April 30 to cover their previous year's CO2 emissions. The EC was expected to publish full aggregated figures for 2018 in mid-May.

EU Allowance futures contract prices for December 2019 delivery on the ICE Futures Europe exchange were slightly lower Monday, trading in a range of Eur21.00/mt ($23.58/mt) to Eur21.61/mt, compared with Friday's close of Eur21.54/mt.

The figures released Monday indicated that CO2 emissions from combustion plants -? representing 64% of total emissions in the system -- fell 5.9% in 2018.

The lower power sector emissions were expected, given continuing decarbonization in the sector in 2018. It reflected ongoing structural growth in renewable energy sources pushing marginal fossil generation off the grid, and several EU countries adopting policies to phase out coal, but also reported increased hydro generation in 2018.

In addition, EU industrial production grew 1.3% in 2018, down from 3.1% in 2017, which contributed to lower emissions in many sectors across Europe, according to S&P Global Platts Analytics.

CO2 emissions from refining fell 1.4%, the preliminary figures showed, while CO2 emissions from metals production fell 1.7% and chemicals sector emissions fell 1.9%.

However, emissions from cement production and aviation bucked the trend, rising 1.6% and 1.2%, respectively, while emissions also increased in several smaller marginal sectors including ceramics and coke ovens.

 

 

 

Source: SP