The latest EU Emission Trading Scheme (ETS) data, with verified emissions for 2022, has been published early April on the EU Transaction Log. Our early analysis of the data for the power and industry sectors show a 1.4% reduction in emissions between 2021 and 2022. In this article we provide 8 key learnings based on the latest installation-specific data from the EU.
Disclaimer: at the time of this writing, a limited number of EU ETS installations have still not yet reported their 2022 emissions. These represent ca. 1.5% of the total number of installations, and 3% of the total emissions. It is unclear whether these installations are still operating and late on reporting, or closed without further emissions in 2022. Depending on the actual case for these installations in 2022, some of the findings in this article may vary slightly.
The total EU ETS emissions for the power and industry sectors have decreased by 1.4% between 2021-2022
When summing-up all verified emissions for stationary installations within power and industry, the total emissions decreased by 1.4% between 2021 and 2022: from 1,296 to 1,278 billion tonnes CO2 equivalents (excluding installations in the UK and installations with missing 2022 data at the time of this writing). This is a relatively low decrease, compared to the average rate of change observed since 2017. Still, emissions in 2022 were below their pre-COVID levels. Many elements may have played a role in the change in emissions, from the energy crisis in Europe (e.g. increase in coal power production) to the decarbonisation efforts and installations closures.
The top 10 emitting countries remain the same
Except for the UK exiting the EU ETS system in 2021, there has been very little change over the past six years for the top 10 countries with largest ETS emissions: Germany remains the country with most ETS emissions, with 353 million tonnes CO2 equivalents in 2022 (stable from the year before). The remaining countries within the top 5 consist of: Poland (174 million tonnes), Italy (136 million tonnes), Spain (96 million tonnes) and France (82 million tonnes). Note that these number exclude installations with missing 2022 data at the time of this writing.
Before exiting the EU ETS system, UK was the 4th country with most ETS emissions, with 103 million tonnes CO2 equivalents in 2020. As of January 1st 2021, the UK Emissions Trading Scheme (UK ETS) replaced the UK’s participation in the EU ETS. In CaptureMap we include data from the three ETS systems currently in operation in Europe: EU ETS, UK ETS and the Swiss ETS.
Power plants dominate the top 10 most emitting installations in 2022
When analysing the data at installation-level, it becomes clear that the largest emitters are within the power sector. The Bełchatów coal Power Station in Poland remains the largest emitter in 2022, with 35 million tonnes CO2 equivalents (increase from 33 million tonnes the year before). It is followed by five lignite-fired power plants in Germany, which emissions all increased in 2022. These increases can be explained by the energy situation in Europe and the increased reliance on coal as energy source in 2022, in light of the challenges related to gas supplies.
With a total of 182 million tonnes CO2 equivalents in 2022, the top 12 installations in the EU ETS cumulate more ETS emissions than entire countries like Spain, France or the Netherlands.
The sectors with largest emissions in 2022 are: power, refining, cement and iron and steel
Installations within the activity category “Combustion of fuels” contributed to the largest share of emissions in EU ETS in 2022, with 795 million tonnes CO2 equivalents. This category includes mostly power production installations, but also smaller contributions from other types of activities, due to the vague activity categorisation in the EU database. Other sectors contributing to large EU ETS emissions in 2022 included: refining (102 million tonnes), cement (96 million tonnes) and iron and steel (84 million tonnes).
Installations within iron and steel are provided with the largest amounts of free allocations
At installation-level, the largest amounts of free allocation of allowances are provided to iron and steel installations. The single installation with most free allowances in allocation in 2022 is ThyssenKrupp Steel Europe AG’s Integriertes Hüttenwerk Duisburg, with almost 15 million tonnes CO2 equivalents in allowance. The top 20 installations with most free allocation of allowances also contains operations within chemicals and oil and gas.
In total, 541 million tonnes CO2 equivalents were provided in free Allowances in Allocation to stationary installations in the EU ETS system in 2022. This amount is decreasing every year, and this reduction provides more and more incentives for installations to seek decarbonisation alternatives.
Power plants have the largest gap between verified emissions and free allocations
Most power plants receive few to no free allocations for their emissions within EU ETS. Therefore it does not come as a surprise that the installations with the largest gap between their verified ETS emissions and the amount of free allocations their receive are all within the power sector. The single installation with the largest gap between emissions and allowances is also the installation emitting the largest amount of CO2 in Europe: the Bełchatów coal Power Station in Poland, with a gap of 35 million tonnes CO2 equivalents in 2022. With increasing EU ETS prices, currently around 100 euros/tonne CO2 equivalent, this gap is equivalent to 3,5 billion euros in value, per year. This makes for an increasingly strong case for decarbonisation measures for the power sector and other sectors with low or no free allocation of allowances.
There were few significant new entrants to the ETS system in 2022
Most new entrants to the EU ETS system in 2022 were small installations with ETS emissions below 50 000 tonnes per year. Only two installations had emissions above this threshold: Air Liquide’s hydrogen production plant located at TotalEnergies’s facility in Normandy, France, and Italcementi’s Cementeria di Sarche in Madruzzo, Italy. Italcementi’s plant is actually a re-start of a cement production plant that had stopped production in 2015, under a different EU ETS account.
Changing EU ETS account numbers over time and missing location data are among the most challenging issues when working with the EU ETS data and tracking installations on a site per site basis. We overcome these challenges by mapping installations precisely (often manually), and matching them against other databases in CaptureMap.
Installations closed in 2022 were mostly power plants, and many were small emitters
Most of the installations closed in 2022 were power plants. Similarly to new entrants, most of the closed installations had emissions below 50 000 tonnes CO2 equivalents per year. Installations with emissions over 100 000 tonnes per year closed in 2022 include:
- EDF’s Centrale Le Havre power plant in Normandy, France (439 000 tonnes CO2 equivalents in 2021)
- Petrogal’s Refinaria do Porto in Portugal (372 000 tonnes CO2 equivalents in 2021)
- Endesa’s Litoral de Carboneras Thermal Power Plant in Almería, Spain (218 000 tonnes CO2 equivalents in 2021)
- Lhoist’s Namêche lime plant in France (152 000 tonnes CO2 equivalents in 2021)
- Lafarge’s Contes cement plant in France (123 000 tonnes CO2 equivalents in 2021)
This data, and more, is available in CaptureMap
The EU ETS data is one of the key sources of information we use to provide an up-to-date and facility-specific overview of CO2 emissions in Europe in CaptureMap. The other CO2 emission reporting databases have strenghts and weaknesses, and combining the data is the best way to get the most of each datasets. By combining ETS emission data with CO2 emissions reporting, we make sure that we have the best quality-assured and up to date database for CO2 emissions available out there.