On Tuesday, 19 November, the European Commission published its report on the EU carbon market for 2023, noting a 16.5% reduction in emissions in the sectors covered by the EU Emissions Trading System (ETS); these emissions are around 47.6% lower than 2005 levels.
This significant drop is largely the result of increasing renewable electricity production – mainly wind and solar power – and returning to gas as a replacement for coal in power generation.
The ETS generated €43.6 billion in revenue in 2023, €33 billion of which was allocated to Member States’ budgets in order to support the energy transition. However, €7.9 billion has not yet been committed to climate projects, which raises questions about how best to use these funds.
Moreover, while including maritime transport emissions in the system from 2024 onwards is progress, this measure is a limited one. In fact, it only covers 50% of emissions from trips between non-EU ports and the EU, which reduces its impact compared with international competitors that are not subject to the same rules.
The risk of carbon leakage remains concerning as well. Exposed to unrivalled external competition in terms of emissions regulation, EU industrial sectors such as steel and cement are still vulnerable.
Finally, although the price of carbon reached €83.60 per tonne in 2023, maintaining these prices remains crucial for ensuring sustainable investment in decarbonisation.
Read the report: https://aeur.eu/f/edz (Original version in French by Nithya Paquiry)