London — Carbon dioxide emissions under the EU Emissions Trading System fell by a record 13.3% in 2020 compared with the previous year, the European Commission said April 15.
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The drop was the largest annual fall on record as the COVID-19 lockdowns combined with ongoing switching from coal to natural gas and renewable energy in the power sector.
"The power sector witnessed a 14.9% decrease, reflecting both reduced electricity consumption due to the pandemic and previously identified decarbonization trends," the EC said in a statement.
"These include both the switch from coal to natural gas-fired power generation, and the replacement of fossil fuels by renewable energy sources," it said.
Overall emissions fell by 13.3% in 2020, according to the EC's figures, which included an 11.2% decrease in emissions from stationary installations to 1.331 billion mt of CO2 equivalent, it said.
Even more significant falls were seen in specific sectors, with aviation emissions falling by a massive 64.1% to 24.5 million mt as government lockdowns across Europe grounded much of the sector.
Emissions from industry decreased by an average of 7%, with reductions observed in most sectors including iron and steel at 11.7%, cement at 5.1%, chemicals 4% and refineries 8.1%, the EC said.
Under the rules of the EU ETS, companies must report their verified CO2 emissions data by an annual deadline of March 31 and must hand over allowances to match the previous year's emissions by April 30 or face heavy penalties.
Although not yet definitive, reporting of CO2 data was higher than 95% for most sectors and countries, the EC said.
The EC released incomplete data April 1 showing a significant fall in CO2 emissions in 2020. Carbon allowance prices ignored the clear bearish demand signal, reflecting much steeper falls in the supply side of the market.
Annual auction volumes continue to tighten due to the Market Stability Reserve, which came into operation in 2019 and cuts supply by 24% of the surplus each year until 2023.
EU Allowance futures contracts for December 2021 delivery on the ICE Futures Europe exchange hit an all-time closing high of Eur44.48/mt ($53.24/mt) on April 12, and closed at Eur44.16/mt April 15.