The European Commission publishes 2016 ETS Emissions
This data shows that coal emissions fell by 11%, but the low carbon price threatens further decarbonisation efforts.
Dave Jones Sandbag Electricity AnalystCoal power plant emissions fell by an impressive 11% in 2016. But emissions from Europe’s 280 coal power plants still accounted for 39% of total EU ETS emissions. It is clear that phasing out coal in favour of renewables is the quickest and cheapest way to rapidly reduce ETS emissions, and policymakers must figure out how to make this happen. A near-zero carbon price is doing nothing to help this. The low carbon price is also stalling industrial decarbonisation, where emissions have fallen by less than 1% in the last four years.
EU ETS emissions fell by 2.4% in 2016, in line with the recent trend
As always, all top ten of the 13,000 polluters are either lignite or hard coal power plants. Despite that, all of these top ten polluters have seen smaller-than-average emissions reductions, compared to the 11% fall for total European coal power plants.
That is because lignite power plants, especially in Germany, continue to run nearly 24 hours a day x 7 days a week.
The new owners of Vattenfall’s lignite plants – EPH’s LEAG – continue with their lack of transparency, by not yet publishing their 2016 emissions. Their omission accounts for over half the missing data in today’s data release.
Falling emissions mean the EU ETS surplus is now over 3 billion tonnes
For the first time in 2016, the surplus – the cumulative cap minus cumulative emissions – has exceeded 3 billion tonnes. Half of this surplus is available to the market, but the “invisible” Market Stability Reserve (MSR) surplus is rapidly growing, and now stands at 1500Mt.
And the gap between emissions and the ETS cap has risen to 11%
ETS emissions fell by 2.4% in 2016, and have fallen on average 2.7% since 2005. This compares to the cap falling by 1.74% in this phase, and no plans to increase the proposed 2.2% fall in the next phase.
This means emissions are now 11% below the cap, and this gap means the the cumulative surplus will continue to increase year on year. Although the Council’s proposals to reform the ETS will help (especially on doubling MSR rate, and on MSR cancellation), the underlying problem of the huge disconnect between the cap and emissions will remain in the future. This is why Sandbag will still campaign to get the cap reduced, to be realigned with actual emissions.