CO2 emissions under EU ETS dip in 2022 in surprise move

Regulated CO2 emissions from power plants and factories under the EU Emissions Trading System fell by 1.2% in 2022, according to preliminary data, surprising many analysts.

Provisional data released by the European Commission on April 4, which showed that emissions from stationary installations across the 27 EU member states, fell to an estimated 1.322 billion mt in 2022 from 1.336 billion mt in 2021, according to an analysis of the data by S&P Global Commodity Insights.

This was much below expectations, with most analysts anticipating a slight increase in emissions.

The fall in emissions came despite an increase in power sector emissions as coal-fired power generation rose sharply in the EU following Russia's invasion of Ukraine.

But emissions from non-grid power negation was down sharply as higher energy prices, rising inflation and ongoing supply chain issues stymied manufacturing growth, according to the preliminary data.

Analysts at S&P Global had forecast 2022 EU ETS stationary emissions to remain flat from 2021 levels at around 1.337 million mt with year-on-year increases from power generation, cement and aviation in 2022.

"Rising emissions from these sectors generally reflect changes in the EUs energy mix following the escalation of military action between Russia and Ukraine, and the resulting sanctions placed on Russian fossil fuel imports, which subsequently drove higher demand for coal-powered electricity generation last year, as EU gas stocks remained low, and sectors (such as aviation and cement) continued their recovery from COVID-19 affected operations," they said in a recent note.