Market News

 April 14, 2008
EU members traded fewer emissions than allowed in 2007

 Brussels, Belgium (GLOBE-Net) - Carbon Market Data, a European company providing carbon market research services, issued a data summary on the recent release of the EU Emissions Trading Scheme‘s 2007 verified emissions reports. 

Based on Carbon Market Data calculations, the EU emissions trading scheme installations were long by 7.5 million tonnes in 2007 (they emitted 7.5 million tonnes CO2 less than they were allowed).

This figure is derived from the verified emissions data submitted so far by approximately 94% of the 11300 installations currently included in the trading scheme. It shows that EU ETS installations emitted - on average - 0.39% less CO2 than the number of distributed allowances they received for free.

In 2007, the 25 countries with active registries allocated for free to their installations a total of 2074 million allowances.  An allowance is a permit to emit one tonne of carbon dioxide.

Verified emissions data submitted so far show that these installations emitted during the same period 1908 Mt of carbon dioxide.  This represents an average increase of 1.13% per installation in 2007 over 2006 (this figure takes into account only the installations that have submitted their emissions report). Total emissions in 2007 are estimated at 2082 MtCO2 (excluding Romania and Bulgaria). This figure includes new installations commissioned in 2007.

This increase in carbon emissions in the EU market is not surprising as the carbon price collapsed during the year 2007, ending close to zero euro. This relative absence of carbon constraint throughout the year seems to have had more impact on emissions trends than the mild climatic conditions observed during the 2007 winter.

In 2007, seven countries allocated to their installations - in aggregate - less allowances than they emitted: Slovenia (0.8 Mt), Ireland (2.5 Mt), Denmark (3 Mt), Greece (4.2 Mt), Italy (13 Mt), Spain (25.3 Mt),), and the UK (41.8 Mt).

All the other countries allocated to their installations more allowances than the amount of carbon emitted in 2007. Poland (-26.3 Mt), France (-16 Mt), Germany (-9.8 Mt), the Czech Republic (-6.8 Mt), Belgium (-6.6 Mt), the Netherlands (-6.1 Mt) and Estonia (-6 Mt) are topping the league of countries with a EUA surplus, whereas Cyprus (-0.5 Mt), Luxembourg (-0.5 Mt), Sweden (-0.6 Mt), Latvia (-0.8 Mt) and Austria (-0.9 Mt) have, in absolute terms, a very small EUA surplus.

The graph below shows the EU ETS emissions-to-cap (the difference between the verified emissions and the distributed allowances) figures of the 25 countries with active registries (the two Maltese installations have not yet submitted their emissions reports).

In the graph shown below are displayed the same emissions-to-cap figures, but this time expressed in percentage of the number of EU allowances distributed by each country.

In 2007 the United Kingdom and Spain saw their emissions respectively at 19.5% and 18% above their national cap. It can also be noted that Germany, the third longest country in absolute terms (-9.8 Mt), emitted only 2% below its national cap.

In terms of emissions evolution between 2007 and 2006, Estonia (+26.5%), Czech Republic (+5%), the Netherlands (+4.1%) and Spain (+4%) are topping the list of countries with rising emissions. Denmark (-9.74%), Lithuania (-7.85%), Sweden (-5.78%) and Portugal (-5.65%) are the best performers among countries that saw their emissions decrease in 2007.

The graph below shows for each country the number of verified emissions versus the total number of distributed allowances for the year 2007. Countries are ranked according to their emissions-to-cap expressed in absolute terms.

The figure displayed represents the number of verified emissions; the red color represents the shortage in EUAs and the green color the surplus in EUAs.

According to Carbon Market Data estimates, the combustion installations for the 25 countries with active registries were short in 2007 - in aggregate - by 38.7 million tonnes CO2. This has to be compared with a shortage of 12 Mt in 2006.  Emissions from the combustion sector grew by 1% over the previous year.

Europe-wide, the sector that had the biggest EUA surplus in 2007 - by far - is the iron and steel sector that appears to be long by about 26 million allowances. This surplus helps iron and steel companies to face the increase in power prices. Though, for the year 2007, with a EUA price close to zero, this EUA "bonanza" would be without effect for the iron and steel companies that had not sold forward their surplus of 2007-vintage EUAs.

For More Information: Carbon Market Data