20 years of emissions trading: Greenhouse gases halved in Europe!

20 years of emissions trading: Greenhouse gases halved in Europe!

20 years ago, in 2005, the European emissions trading system (EU-ETS) was launched to put the Kyoto climate protection agreement into practice. The purpose is clear: to reduce greenhouse gases in the EU. Despite some challenges, the system has proven successful and the numbers speak for themselves. How Mopo reported that the participating facilities were able to reduce their greenhouse gas emissions by an impressive 50%. Total emissions in Europe fell by 51%, while Germany recorded a decline of around 47%.

What is behind this success? Around 9,000 systems in the energy sector and energy-intensive industries take part in EU emissions trading, which together are responsible for around 40% of greenhouse gas emissions in Europe. The concept is based on a “cap & trade” system in which companies have to purchase emission rights to prove their emissions and can trade them with each other. Over time, the number of certificates available will be gradually reduced, which will increase price pressure. By 2027, fuel emissions will also be integrated into the system, which will likely make heating and refueling more expensive Federal Environment Agency.

Successes and challenges

The positive effects of emissions trading are also highlighted by the Federal Environment Agency (UBA). In the energy sector in particular, there has been a noticeable decline in emissions, primarily due to the increasing share of renewable energies and the reduction in coal-fired power generation. Nevertheless, there was a slight increase in emissions of 1% in the industrial sector. Overall, the recorded emissions in Germany have been reduced by 47%, which is considered a success, even if the UBA does not name a specific share of emissions trading in this development, reports Time.

Another interesting aspect is the CO₂ price, which was relatively low in emissions trading until 2018. However, the price has now leveled off at currently 55 euros per ton of CO₂ emitted. Experts expect that prices could reach triple-digit levels in the coming years, which may also be driven by future changes in the trading landscape.

Looking into the future

The course has been set for the coming years. From 2024, maritime transport will be included in the trade model and the challenges surrounding CO₂ emissions will continue to increase. From 2027, fuels will also be recorded, which could result in high costs, especially for consumers. The UBA sees it as essential to provide accompanying relief for people in order to cushion the financial burden.

During the development of European emissions trading, numerous other regulations and initiatives were added, such as the Renewable Energy Act and the legally stipulated phase-out of coal, all of which have contributed to reducing greenhouse gases. The question remains whether the ambitious targets of 62% emissions reduction by 2030 can be achieved - a challenge that poses major tasks for everyone involved.