Emissions trading 2018: German installations cut emissions by 3.5 per cent

Reduction is due to declining emissions in the energy sector

Ein Kraftwerk und Stromleitungen.Click to enlarge
The 2018 emissions of German installations in the ETS were around 422 million tonnes of CO2equ.
Source: Tom Bayer / Fotolia.com

The 2018 emissions of the roughly 1,870 stationary installations in Germany recorded in the European Emissions Trading System (EU-ETS) amounted to around 422 million tonnes of carbon dioxide equivalents (CO2eq). This is a 3.5-percent decrease compared to the previous year. The German Emissions Trading Authority (DEHSt) at the German Environment Agency presented these and other details in this year’s report on the greenhouse gas emissions of the stationary installations subject to emissions trading and of the aviation sector in Germany for the year 2018 (VET Report 2018). The decline in emissions is chiefly due to lower emissions in the energy industry. Emissions in the energy-intensive industries, however, remain unchanged at the high levels of previous years.

Around 70 percent of the greenhouse gas emissions from stationary installations in Germany subject to emissions trading come from energy installations, and nearly 30 percent from industrial plants. The 2018 emissions of power plants decreased by about four percent to 298 million tonnes of carbon dioxide. The reason why is the considerable increase in feed-in of wind and solar power, which led to a decline in the use of lignite, hard coal and natural gas for power generation. Total power generation was down slightly. The relatively steep decline in emissions in the energy industry is thus a continuing trend. Emissions in the energy-intensive industries in the period 2013-2017 varied between 123 and 126 million tonnes of CO2eq and remained at a similar high level of 124 million tonnes of CO2eq in 2018. The decline in total ETS emissions in Germany since 2013 is almost entirely traceable to the downward trend in emissions from power plants.

“The current development in emissions trading is a positive one and underscores the important role played by the emissions trading sector in achieving the EU’s climate goals in the energy and industry sectors. The reform of the European emissions trading scheme is showing effect,” said Maria Krautzberger, President of UBA. “Nevertheless, we need a carefully coordinated combination of measures and instruments, such as the planned phase-out of coal in Germany. The low level of reductions in industry up to now makes it clear that, besides the CO2 price signal, we need to promote existing market-ready technologies and to invest in innovations up to market readiness in order to drive the decarbonisation of the industry sector."

The considerable price increase for emission allowances in 2018 (one European Emission Allowance (EUA) – corresponds to one tonnes of CO2) sent an effective price signal to the energy industry in particular and is another important factor next to higher prices for hard coal in the noticeable decline in emissions from the use of hard coal for power generation. However, the price signal is still too weak in industry to create effective incentives to invest in emission abatement technology. EUA prices rose steadily virtually throughout 2018, starting at around 7.60 euros at the beginning of the year, and rising to 25.80 euros by year's end. The average EUA price in 2018 was around 16 euros.

Emissions in the EU: Since 2005 ETS emissions in Europe have fallen by 29 percent, a rate which is considerably greater than in Germany alone (around 18 percent). The decline in emissions in the period 2013 to 2018 has slowed down Europe-wide: in 2018 emissions were around 12 percent below the 2013 baseline both in Germany and Europe.

Emissions in aviation: For 2018, 72 aircraft operators subject to emissions trading administered by Germany reported emissions of 9.4 million tonnes of carbon dioxide. This represents a year-on-year increase of around 2.7 percent in emissions and a new all-time high.

Further information:

The German Emissions Trading Authority (DEHSt): The German Emissions Trading Authority at the Federal Environment Agency is the national authority entrusted with the implementation of emissions trading for stationary installations and for the aviation industry. Its mandate includes management of the allocation and issuance of free emission allowances, reviewing emissions reports and monitoring plans, and administration of accounts in the EU emissions trading registry. DEHSt operates auctioning and informs the public and market participants of its results. It is also in charge of the administration of the project-based mechanisms Joint Implementation and Clean Development Mechanism. DEHSt is also the national licensing authority for the payment of state aid for electricity-intensive companies to compensate for indirect CO2 cost (electricity price compensation).

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