The European Commission today adopted its annual report on the functioning of the European carbon market in the context of the State of the Energy Union report. Covering the year 2015, the report also presents certain initiatives proposed or agreed in 2016.
The report concludes that during the third year of phase 3 of the EU Emissions Trading System (EU ETS), the system continued to deliver emissions reductions in the EU. Greenhouse gas emissions from installations participating in the system decreased by around 0.4%. This confirms the decreasing trend over the last five years.
In 2015, the surplus of emission allowances that has built up in the system since 2009 – largely due to the deep and sustained economic recession which reduced emissions more than anticipated – also showed for the first time a marked decline, by some 300 million allowances.
Under the revised rules proposed for phase 4 (2021-2030), the EU ETS will continue to be a cost-effective driver for low-carbon investments for the years to come. A stronger, better functioning European carbon market has the potential to make a major contribution to the transition to a low-carbon and more energy-secure economy in Europe.
The issues covered by the report include:
The Commission will continue to monitor the carbon market and intends to adopt the next annual report in late 2017.