EU ETS emissions fell 0.7% last year to 1.802 billion tonnes, analysts at Sandbag forecast on Tuesday, a figure slightly higher than their previous projections as power sector output was higher than expected.
The environmental campaigners updated their forecasts amid fresh electricity sector data and ahead of the Apr. 1 release of EU ETS data for 2015.
Sandbag’s estimated reduction is well below the 4.5% cut in capped emissions in 2014, which was led by a 7.5% drop in power sector CO2.
“Despite the record increase in renewables in Europe, fossil generation was unchanged, and [power sector] emissions have fallen by only about 0.5% in 2015,” Sandbag said.
They added that increases in coal generation in the Netherlands, Spain, Portugal and Poland completely offset substantial cuts in UK coal-fired output.
While there was a record increase in renewable generation – led by Germany, UK and Italy – this made little impact as dryer weather curbed hydroelectric output, Sandbag added.
Gas generation also saw its first EU-wide increase in CO2 since 2010, and Germany’s carbon-intensive lignite- and coal-fired power output barely changed year-on-year amid record power exports in the country.
2016 AND BEYOND
Sandbag kept their 2020 projection unchanged and expects cuts in ETS emissions to contribute to an overall reduction in EU GHGs of 30% beneath 1990 levels, some five percentage points above official EU projections and well above its -20% target for the end of this decade.
They said the levelling off of 2015 EU ETS emissions was merely a “pause for breath” amid deeper declines this decade due to rising renewables generation and falling power demand.
While many analysts predict the massive 2 billion-unit EUA surplus will shrink in the coming years as the MSR takes effect, Sandbag expects this glut to swell to over 4 billion by 2020, mainly because it estimates that energy consumption will fall sharply as more efficiency measures are deployed.
Sandbag’s 2014 ETS emissions projection of 1.814 billion tonnes was the closest of seven analysts polled by Carbon Pulse ahead of the European Commission’s data publication, which showed that capped installations emitted 1,812 billion tonnes that year.
Sandbag added that power emissions are likely to resume their downward trend in 2016 as six coal-fired plants are due to close in the UK and Netherlands, several nuclear plants across Europe come back online after maintenance and resolved safety issues, and the new France-Spain power interconnector leads to the former’s nuclear plants crowding out the latter’s coal plants.
By Ben Garside – email@example.com