The European Commission has published on Tuesday  its annual Carbon Market Report, an analysis on the functioning of the EU Emissions Trading System (EU ETS). The document covers the entire 2023 and the first half of 2024.

According to the report, emissions from the power and industrial installations under EU ETS saw an impressive decrease of 16,5% in 2023 compared to the year before and are now around 47,6% below levels reached in 2025. 

“This is the highest reduction in these emissions to date,” said the  EU executive, adding that “with this development, emissions are well on track to achieve the 2030 target of -62%.” This is significantly greater than the  previous largest year on year decline (- 11,4%) seen in 2020 reflecting reduced power consumption due to the Covid-19 pandemic.

This time around, the downward trend was driven by the rapid decarbonisation of the power sector due to the higher renewables and an increasing use of biomass. Furthermore, “the trend of an increased use of hard coal observed in 2022, linked to the increase in natural gas prices due to Russia’s invasion of Ukraine, has mostly reversed in 2023.” The recovery of hydropower due to more favorable conditions as well as increased nuclear generation also helped the emissions reduction in the power sector, though to a lesser extent. 

“Early indications show that in the first half of 2024, around 50% of electricity generation came from renewables, with wind and solar generating more electricity than fossil fuels combined,” the report said, referring to an analysis from think tank Ember published last July.