Key trends and drivers in greenhouse gas emissions in the European Union

The sectors covered by the EU ETS recorded the largest emission reductions

A number of policies, both EU- and Member State-specific, have contributed to the overall domestic net emission reduction in GHGs observed since 1990. These include the EU ETS, the effort sharing legislation and the LULUCF Regulation. This three-tier legislation is embedded in the EU architecture to meet domestic and international climate change targets.

The EU ETS operates as a ‘cap-and-trade’ system limiting GHG emissions from energy production, industry, aviation and maritime transport. Meanwhile, both the effort sharing legislation and the LULUCF Regulation rely on policies and measures implemented by Member States for the sectors not covered by the EU ETS.

In the EU, GHG emissions decreased in most sectors between 1990 and 2024 (Figure 3) and almost all Member States reduced emissions compared to 1990, contributing to the overall positive EU performance. The top three emission reductions occurred in electricity and heat production, industry and the residential sector.

Emissions from electricity and heat production decreased significantly, by 58%, in the 1990-2024 period. In addition to improved efficiency in transformation, there has been a clear move towards less carbon-intense fuels. Between 1990 and 2024, the use of solid and liquid fossil fuels in thermal power stations decreased strongly, with emissions falling by 68% and 86%, respectively.

For natural gas, consumption developed in the opposite direction and emissions have increased by 44% since 1990, although in the two years from 2022 to 2024, emissions fell by almost 18%. Emissions from coal consumption in 1990 were more than three times higher than in 2024. Because of the higher carbon intensity of hard coal and lignite, compared to other fuels, lower use has had a multiplier effect.

The other key factor has been the use of renewable energy sources in electricity and heat generation, which has increased substantially in the EU since 1990.

A clear example can be seen in the evolution of CO₂ emissions per kilowatt-hours (kWh) of electricity and heat produced by the main activity producers. This takes into account not only fossil fuels and biomass but also other (non-combustible) renewables and nuclear energy. Notwithstanding differences across Member States, average EU electricity and heat produced in 1990 emitted 477gCO₂ per kWh, compared to 175gCO₂ per kWh in 2024. Figure A1 (in the annex) presents an overview of trends according to Member State and the GHG emissions intensity of electricity generation is discussed in an EEA indicator.

Emissions in industry have also decreased substantially since 1990. A combination of factors explains lower emissions from industrial activity, including improved efficiency and lower carbon intensity. Additionally, there have been structural changes in the economy, with a higher share of services in total GDP. For the whole industrial sector, including both combustion and processes, EU emissions almost halved between 1990 and 2024.

The third sector with notable reductions was the residential sector, which largely covers households with individual heating. Here, emissions decreased by over 40% between 1990 and 2024, despite an increased population and the rapid growth in single-occupant households.

Energy efficiency improvements from better insulation standards and retrofitting in buildings can partly explain lower demand for space heating over the 34 years from 1990 to 2024. It is worth highlighting that warmer winters have also been a key factor in lowering GHG emissions, alongside a less carbon-intensive fuel mix. Europe has become warmer — particularly in winter — which has contributed to lower fuel use and GHG emissions because of the lower demand for space heating.

While the heat and power sector has been the main contributor to lower GHG emissions since 1990, when allocating emissions from the energy supply sector (including electricity and heat production) to the final end users, sectoral emission trends confirm that the largest energy-related emission reductions took place in industry and in the residential sector. Meanwhile, the top three areas for emission increases were road transport, refrigeration and air conditioning, and forest land within the LULUCF sector.

Emissions from road transportation increased by 24% between 1990 and 2024, both for passenger and freight transport, despite climate policies and the deployment of less carbon-intensive and more efficient vehicles on the market. Increasing transport demand has partly outpaced climate benefits.

According to Eurostat data, the share of battery-only electric cars is growing rapidly and reached 14.6% of new vehicle registrations in 2023. However, they still represent a relatively small part of the total vehicle fleet.

Hydrofluorocarbon (HFC) emissions from refrigeration and air conditioning increased significantly between 1990 and 2014 but decreased for ten consecutive years after that, due to the phase down of F-gases as required by EU legislation and, more recently, a phase out.

The last sector where emissions increased (or — more specifically — the size of the EU carbon sink decreased) since 1990 is forest land. The main reasons for the decrease in net removals of carbon from the atmosphere are the ageing of forests and a lower annual increment, as well as increased harvesting and negative impacts of climate change. This negative trend has accelerated in the past few years.

Figure 3. Trends in EU GHG emissions by sector

In the 2005-2024 period, the EU ETS accounted for over three quarters of the net reduction in total EU GHG emissions (Figure 3). The remaining quarter came from sectors outside the EU ETS, covered by the ESR and subject to national targets. While emissions decreased in the EU ETS and ESR sectors, the LULUCF sector saw a declining carbon sink between 2005 and 2024.

While the above analysis suggests that the greatest improvements in emissions have occurred in the energy sector, emission reductions in other sectors and categories have also been significant. Table 1 sets out the categories that have made the largest contribution to the change in total GHG emissions and removals in the EU between 1990 and 2024.

In terms of the individual GHGs emitted in the EU, CO₂ was responsible for the largest reduction in absolute emissions from 1990 to 2024 (1.4 billion tCO₂). However, emissions have also decreased significantly for CH₄ (by 279MtCO₂e) and N₂O (by 120MtCO₂e). Emissions from fluorinated gases have increased by 9MtCO₂e between 1990 and 2024 but they have decreased substantially since 2014.

CH₄ emissions are regulated under the ESR. The largest sources are fugitive emissions from energy, as well as the agriculture and waste sectors. CH₄ is significant because it is more effective at trapping heat than CO₂ and its concentrations are increasing rapidly.

At the same time, it has a shorter lifespan than CO₂, meaning that policies aiming to reduce CH₄ emissions will deliver quick benefits in terms of temperature and climate change mitigation. Reducing CH₄ emissions also results in lower ozone formation and improved local air quality.

Reductions in CH₄ emissions in the EU reflect a decrease in agricultural livestock — with higher milk yield sustaining production levels with less cattle — and increased efficiency in the agricultural sector. This includes changes in the agricultural management of organic manures, such as the production of biogas from anaerobic digesters and the use of recovered CH₄ (as biogas or biomethane) in the energy sector to produce heat and electricity.

Other key reasons for decreased CH₄ emissions are:

• lower levels of coal mining, particularly underground;
• lower levels of post-mining activities;
• decreasing oil and gas production;
• improved oil and gas pipeline networks, including lower losses from gas distribution networks.

Less waste disposal on land alongside increased recycling, composting, landfill gas recovery and waste incineration with energy recovery have also contributed to the reduction in CH₄ emissions since 1990.

Table 1. Overview of EU categories, excluding international transport, where changes in net emissions were above 20MtCO₂e between 1990 and 2024

Source: European Environment Agency (EEA).

EU emissions of N₂O have decreased less than CH₄ in absolute terms. N₂O is a long-lived GHG with a global warming potential 265 times greater than CO₂ over 100 years. At the same time, it contributes to the deterioration of the ozone layer. Thus, there are significant synergies between climate change mitigation and reducing ozone depletion related to efforts to reduce N₂O emissions.

In terms of trends, N₂O emissions have decreased in adipic and nitric acid production. This can be partly explained by high efficiency abatement technologies, underpinned by EU regulations and environmental permitting, as well as the inclusion of these sources in the EU ETS.

Agricultural soils are by far the largest source of N₂O emissions. These emissions have decreased since 1990 — mainly due to lower nitrogen inputs and better manure management — but have remained relatively stable over the past two decades.

Emissions, revenues and carbon removal pathways

The EU ETS functions as a central component of EU climate policy, contributing to emission reductions while providing a framework that supports investment in low-carbon technologies. It also generates financial resources that can be used for innovation, with potential implications for competitiveness and energy security.

Revenues generated under the EU ETS have so far exceeded EUR 245 billion from auctioned emission allowances. These revenues are largely allocated to Member States to support climate action and energy system transformation, while also contributing to EU-level instruments such as the Innovation Fund, the Modernisation Fund, the Recovery and Resilience Facility and, since 2026, the Social Climate Fund.

In the area of carbon removals, forests constitute the primary terrestrial carbon sink within the EU and play a significant role in climate mitigation as well as in providing ecosystem services. Additional carbon removal technologies are currently deployed at a limited scale. Their application may be particularly relevant in sectors where emissions are difficult to reduce, especially where other mitigation options are less effective or not available.

These technologies are expected to increase in importance as the EU progresses toward its objective of climate neutrality by 2050 and the potential achievement of net negative emissions thereafter.