Greenhouse gas emissions under the EU Emissions Trading System

Europe’s Emissions Trading System (ETS) has seen significant greenhouse gas emission reductions since its inception in 2005. Carbon pricing, changes in fuel prices and climate policies such as those promoting renewable energy, have driven emission reductions from stationary installations and contributed substantially to EU climate objectives. After a post-pandemic rebound in 2021, emissions returned to a downward trend in 2022 due to reductions from industry. The new ETS target for 2030 is defined as a 62% reduction compared to 2005 for the whole ETS scope. According to recent projections, this target could come within reach if strong and decisive action is taken.

Year	Historical emissions	Projected emissions (with existing measures)	Projected emissions (with additional measures)	Cap on emissions
2005	2093
2006	2092
2007	2118
2008	1992
2009	1769
2010	1816
2011	1792
2012	1741
2013	1686
2014	1619
2015	1630
2016	1607
2017	1621
2018	1557
2019	1414
2020	1253
2021	1337			1572
2022	1312.6	1318.41	1298.32	1529
2023		1330.14	1298.9	1486
2024		1269.2	1223.99	1312
2025		1228.82	1170.61	1227
2026		1160.25	1095.94	1116
2027		1094.45	1024.04	1032
2028		1042.62	968.26	946
2029		986.91	904.11	860
2030		949.16	856.85	774

The EU Emissions Trading System (ETS) is a ‘cap and trade’ system operating in the European Economic Area . It sets a yearly cap on greenhouse gas (GHG) emissions from stationary installations, covering power and carbon-intense industries, flights within the European Economic Area and, from 2026, international navigation. In 2022, the EU ETS emissions from stationary installations accounted for 37% of total GHG emissions from the European Economic Area.

Stationary emissions covered by the EU ETS have significantly decreased since the inception of the system in 2005. The main drivers of long-term reductions have been an increasing carbon price set by the EU ETS, changing fuel prices (which has encouraged a switch from carbon-intensive coal) and renewable energy policies that promote the decarbonisation of the power sector. Lower energy demand has also played a key role, resulting from the roll-out of energy efficiency measures, declining demand for certain industrial products and global events such as the 2008 economic crisis and the COVID-19 pandemic. Data for 2022 show a slight decrease of 24 megatonnes of carbon dioxide equivalents (Mt CO₂e) in emissions from stationary installations following the rebound of 2021. Emissions remained higher than the minimum observed in 2020, however, with ETS emissions in 2022 at 37% below 2005 levels.

In May 2023, the ETS Directive was amended to include a new, more ambitious target for emissions covered by the EU ETS, namely a 62% reduction compared with 2005 for the whole ETS scope, including aviation and shipping, as well as a more stringent yearly emissions cap. This was part of a series of legislative proposals that aim to reduce the EU’s net GHG emissions by 55% by 2030, compared with 1990— the Fit for 55 package. The EU also aims to achieve climate neutrality by 2050.

Projections provided by participating countries, based on a 'with existing measures' (WEM) scenario, indicate that, in 2030, stationary ETS emissions can be expected to reach emissions levels that are 55% below 2005 levels. The more ambitious “with additional measures” (WAM) scenario projects a 59% reduction compared to 2005. The power sector and, to a lesser extent, manufacturing industries are expected to account for most of the projected reduction in ETS emissions. According to the projections, ETS emissions would exceed the cap between 2025 and 2028. The EU ETS target still reaches further than the more ambitious projections scenario by a small margin. It shows that with strong, decisive and continued efforts, the EU has a chance to meet its ETS target. It should be noted, however, that the projections do not yet fully take the new EU ETS scope into account, and full comparability will first be possible once the scope of the projections and target match fully.

Changes in emissions covered by the EU Emissions Trading System by sector, 2013-2022, relative to 2013

Most of the reduction in EU ETS emissions is accounted for by a reduction in emissions from ‘combustion of fuels’, which mainly covers the power sector. This reflects the ongoing decarbonisation of the European energy system, characterised by a switch from coal to gas and renewables. This activity is by far the largest contributor to ETS emissions (60%), explaining why the reduction in this sector is responsible for most of the reduction in emissions in the last decade. Emissions from ‘combustion of fuels’ increased slightly in 2022, partially linked to high gas prices and low production from hydro and nuclear, which encouraged the use of high-carbon fuels (such as coal) in the power sector.

ETS emissions from industry show a mixed picture. Overall, industry emissions have declined slightly since 2013, driven by decreases in emissions from 'other sectors' as well as the iron and steel sector. In 2022, emissions from cement, iron and 'other sectors' decreased significantly, compensating for the slight increase seen in the power sector and in refineries.

Flights within the European Economic Area are also covered by the EU ETS. Emissions from aviation have grown rapidly since 2013, due to increased air travel and difficulties in decarbonising this sector. Emissions were abated only by the strict travel restrictions imposed during the COVID-19 pandemic. Since then, emissions from aviation are accelerating, which reflects an increase in air traffic.

Supporting information

Definition

This indicator shows greenhouse gas emissions covered under the EU Emissions Trading System (EU ETS) since its inception in 2005. It also shows projections of this emissions to 2030 and the maximum number of emissions allowances (cap) foreseen.

Figure 2 shows the evolution of emissions, in percentage change since 2013, for selected industrial sectors and for aviation. The year 2013 was chosen since it is the first year offering a comparable scope in sectoral categories.

Detailed data and information on historical ETS emissions can be found in the ETS data viewer and associated documentation. Information on GHG Projections can be found in the dedicated data viewer, datahub and Climate and Energy platform.

Geographical scope:

The EU ETS applies in the European Economic Area, comprising all the EU Member States, Iceland, Liechtenstein, and Norway. The United Kingdom does not participate in the EU ETS since 2021 and has been excluded from this indicator. The exception are power plants in Northern Ireland, which are included in the system. For intra-European flights, the ETS includes flights departing and landing within the European Economic Area, as well as flights to Switzerland and the UK. Flights to and from outermost EU regions will be added from 2024. For extra-European flights the obligations under the EU ETS Directive can be fulfilled through CORSIA .

Sectors:

The EU ETS applies to stationary facilities covering the electricity and heat sector and energy-intensive industries, over certain thresholds. Flights departing and landing within participating countries are also covered by the ETS, as well as flights from EEA countries to UK and Switzerland. From 2026 on, international shipping will be included, too. For more information on the scope of the ETS please visit the dedicated Commission’s website.

Projections:

The projections from EU Member States, Iceland and Norway were provided by the countries to the EEA as part of their reporting under Article 18 of the Governance Regulation. Emissions from Liechtenstein are projected to be zero, as their ETS emissions in 2021 and 2022. Emissions of Northern Ireland have been estimated, applying the average reduction of EU-27 countries.

Targets:

The indicator considers the current scope of the EU ETS, while the new target applies to an extended scope including also maritime transport, among other changes. More information is available in DG CLIMA’s website.

Methodology

Data on emissions from the EU ETS originates from EU Transaction Log and is provided by the EU Commission to the European Environment Agency. This data is then processed by the European Topic Centre on Climate Change Mitigation (ETC-CM). More information available on the ETC-CM documentation (under the tab Additional Information).

The scope of the ETS has changed since its inception, with new sectors, gases and countries being added. To make emissions comparable across years, an estimate was made to reflect the current scope across the whole timeline (i.e. how emissions would have been in the past if the current scope was applied). More information on this scope estimate can be found here.

Projections of greenhouse gases are provided by Member States to the EEA under the Governance Regulation. This occurs every two years with some Member States providing updates yearly.

Policy/environmental relevance

The EU ETS is a cornerstone of the EU's policy to combat climate change and its key tool for reducing greenhouse gas emissions cost-effectively. It is the world's first major carbon market and remains the biggest one.

The EU ETS is a ‘cap and trade system’, whereby a cap (i.e. a determined quantity of emission

allowances) is set on the emissions from the installations covered by the system. The cap decreases

gradually in order to achieve emission reductions over time. Installations can trade emission allowances with one another, which ensures that emission reductions take place where it costs least.

This indicator helps monitoring the reduction in emissions under this key mechanism and tracking the progress towards the agreed target. It also illustrates differences between different industrial sectors and aviation, highlighting differences in progress among them.

Accuracy and uncertaintiesData sources and providers

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Greenhouse gas emissions under the EU Emissions Trading System

Figure 1. Historical and projected emissions from stationary installations covered by the EU Emissions Trading System in the European Economic Area

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Figure 2. Changes in emissions covered by the EU Emissions Trading System by sector, 2013-2022, relative to 2013

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