German industry and energy emissions almost halved since introduction of EU trading system
Clean Energy Wire
Emissions from Germany's industry and energy sectors have almost halved since the introduction of the European Emissions Trading System (EU ETS) 20 years ago, the Federal Environment Agency (UBA) said. Germany saw a 47 percent drop in emissions from energy-intensive industries and the energy sector. Across Europe, ETS emissions have fallen by 51 percent during the same period.
"Since its introduction, emissions trading has gradually developed into the central climate protection instrument in Germany and Europe," said UBA head Dirk Messner. The energy sector has driven the emissions decline in Germany, cutting greenhouse gases by 54 percent since 2005. UBA attributes this recent progress to the growing share of renewable energies, the decline in electricity generation from coal and lignite, and the increase in net electricity imports from other countries.
"Embedded in an effective mix of instruments, emissions trading will make a significant contribution to achieving the legal climate targets of Germany and the EU," said Daniel Klingenfeld, who heads the emissions trading authority division at UBA.
The ETS is a market mechanism that puts a price on CO2 emissions, thus creating an incentive to reduce them. Companies must buy or receive allowances corresponding to their CO2 emissions, which makes the burning of fossil fuels more expensive. The EU sets a cap on how much CO2 can be emitted, and reduces the maximum amount each year. Emissions from inter-European air transport and maritime transport were added to the ETS in 2012 and 2024 respectively. A reformed ETS 2 is also set to cover the entire heating and transport sector by 2027.
Around 85 percent of German emissions are covered by carbon pricing systems – the EU ETS and Germany's national carbon price, which currently already covers emissions from heating and transport. The proceeds from the levy are the main source of funding for the special "climate and transformation fund", which is used to finance energy transition projects.
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