Effectiveness of EU Emissions Trading: What drives emission developments?
Analysis of selected sectors and countries
Since its launch in 2005, the EU Emissions Trading System (EU ETS) has significantly reduced greenhouse gas emissions in Europe’s power and industrial sectors. A new report by the German Environment Agency (UBA) shows where the trading system’s price signals have triggered cleaner electricity generation, and where economic demand, fuel choices, or technological pathways have played a stronger role. The analysis of steel, cement, refining and combustion sectors highlights both the successes of emissions trading and the challenges ahead for a climate-neutral industry.
European emissions trading (EU ETS) is a central component of German and European climate policy. This final report summarises the results of a research project that investigated the causes of emissions trends in the most relevant sectors in terms of emissions (combustion, iron and steel industry, cement clinker production, refineries) of the EU ETS 1 in the period 2005 and, depending on the sector or approach, until 2017/2019/2022. As part of the project, the development of the four sectors mentioned was analysed with regard to emissions and other parameters and their causes. In addition, two decomposition analyses were used to identify the main drivers of emissions trends in cement clinker production and iron and steel production in the EU ETS.
