Isra-Mart srl : EU ETS emissions rise 3.5 per cent

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Figures in line with expectations leave carbon markets flat, analysts say
Emissions from factories and power stations in the EU's emissions trading scheme (EU ETS) rose 3.5 per cent last year as power demand and industrial output increased, according to preliminary data released today.

Figures from 10,221 installations indicated the first increase in three years, with emissions rising to 1.754bn metric tons in 2010 from 1.695bn tons for the same installations in 2009. However, emissions remained far below the 2010 cap of 1.985bn.
Germany saw one of the largest growths in output, six per cent, while the UK's emissions went up 2.8 per cent, Poland's 4.4 per cent and Italy's 3.3 per cent.

The data, published by the EU commission, covers about 85 per cent of the factories and power plants under the scheme, which account for 40 per cent of the EU's emissions.

No data was published from the Czech Republic, the country most severely hit by this year's cyber attacks, and several other nations, while the amount of offsets used and the auction of EU allowance permits (EUAs) have not yet been revealed.

The EU ETS drives the bloc's compliance with the target established under the Kyoto Protocol and is crucial for traders trying to estimate the price of carbon from the supply and demand of EUAs.

Any upward pressure on the price of carbon would in turn increase power prices and could push countries towards investments in renewable energy.

However, Alessandro Vitelli, director at analysts IDEAcarbon, said the numbers were very much in line with what traders were expecting and the market had had little response.

"It's tough to draw any final conclusions from these figures," Vitelli told BusinessGreen. "The figures are in line with expectations and the market is flat as you like."

Kjersti Ulset, manager of European carbon analysis at Thomson Reuters Point Carbon, agreed that the results were largely in line with expectations, despite revealing a complex picture of the European energy market.

"This data certainly confirms that 2010 was a year of recovery in Europe since we saw emissions increase for the first time in two years, however the picture is complicated and does not look equally promising for all sectors and countries," she said, adding that effects from growth were somewhat offset by an improvement in carbon intensity driven in part by large increases in hydrogeneration in Spain, Portugal and Greece.