London — CO2 emissions from the top 10 largest emitting plants in Europe were little changed in 2018 from the previous year, according to partial data released Monday by the European Commission.
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Register NowWhile indicative CO2 emissions across the 31-nation EU Emissions Trading System fell by an estimated 4% overall in 2018, emissions at the largest installations remain little changed, the figures show.
Total CO2 emissions from the 10 largest plants stood at 189.9 million mt in 2018, down 0.6% from 191.1 million mt in 2017, the EC figures show. Together, these plants emit over 10% of the 1.75 billion mt of CO2 emitted by more than 13,000 plants and factories across the system. This is equivalent to more CO2 than all the regulated plants and factories in Poland, according to EC data.
The top 10 plants are dominated by Polish and German world-scale power plants that run on lignite -- the most emissions-intensive fuel for electricity generation.
"Our balances demonstrate that stickiness of lignite generation, as hard coal generation was down 11% year on year, while lignite was down by just 2%," said Jeff Berman, director of emissions and clean energy at S&P Global Platts Analytics.
Polish PGE's Belchatow 5.4 GW lignite-fired power plant consistently tops the list, with CO2 emissions of 38.3 million mt in 2018, up slightly from 37.6 million mt in 2017, and 35.2 million mt in 2012.
Other large emitting plants include German RWE's lignite-fired plants at Neurath, Niederaussem and Weisweiler, and Czech EPH's German lignite plants at Jaenschwalde, Lippendorf, and Boxberg, and a hard coal unit at Schwarze Pumpe.
"Ultimately, this gets back to the emissions abatement cost curve," said Berman.
"Power sector coal-to-gas switching, particularly from a less efficient coal plant to an efficient gas plant, represents the lower end of emissions abatement costs," he said.
"Lignite generation has lower marginal costs, and so a higher carbon price would be required to encourage reductions from power sector lignite-to-gas switching," he said.
"If lignite reductions are necessary to meet targets or balance the EU ETS, but carbon prices are not high enough, then non-market mechanisms may be necessary. However, there is still enough hard coal in the system that this is not an immediate concern," said Berman.
CO2 emissions across the whole EU ETS continue to show a long-term downward trend. The reductions are taking place where marginal less efficient power plants are pushed out of the merit order for power generation, particularly during windy conditions, as Europe's installed wind power capacity increases year on year.
Total CO2 emissions from stationary installations stood at 1.754 billion mt in 2017, the latest year for which there is complete data, compared with 1.904 billion mt in 2011 - a drop of 150 million mt or 7.9%.
As a result of a long-term oversupply of allowances, carbon prices languished at below Eur10/mt from 2013 to 2017. That changed in 2018, with prices surging to over Eur20/mt as regulators introduced measures to curb the oversupply, increasing the cost of emitting CO2 for Europe's emissions-intensive industries.
However, even when faced with rising costs of carbon allowances, the largest lignite-fired power plants in Europe remain competitive in the power market. They achieve this through scale of operation and lack of exposure to fuel transport costs and fuel price risk, with local fuel supplied on site by lignite mining operations.
One plant that had not reported its CO2 emissions for 2018 as of April 1 was the 3 GW Maritsa East lignite fired power plant in Bulgaria, whose CO2 emissions from two separate units in 2017 stood at 16 million mt, according to the EC's figures.
With carbon prices of below Eur40/mt keeping lignite-fired power plants competitive against cleaner sources of electricity, several countries in Europe continue to seek long-term phase-outs for lignite. The most significant of these is Germany, while the Netherlands and UK continue to reduce the use of hard coal for power generation over the long term.
"Closure of lignite plants must happen quickly, and governments and utilities are only slowly waking up to this," analyst Dave Jones at UK-based think tank Sandbag said Tuesday.
"Economics is swinging against lignite, due to reducing wind and solar costs, higher carbon prices, reducing load factors, tighter emissions controls and an aging fleet," he said.
"But economics is not the only factor: governments must decide to phase out lignite by 2030. This is wholly possible, and the numbers of national commitments to phase out hard coal shows how quickly this can happen," he said.
Also making the list of top 10 emitters in 2018 was Irish budget airline Ryanair, whose total CO2 emissions stood at 9.9 million mt in 2018, up from 9.2 million mt in 2017 and 7.5 million mt in 2012 when aviation was brought into the EU ETS.
As EU member states gradually phase out lignite and hard coal for power generation, regulators' focus is likely to switch to other sectors including aviation, whose CO2 emissions continue to rise.
-- Frank Watson, frank.watson@spglobal.com
-- Edited by James Burgess, newsdesk@spglobal.com