The emissions amounted to the equivalent of 2.118 billion tonnes of CO2, with Germany, the UK and Italy topping the list of the most polluting countries, according to final data published on Friday (15 May).
These were also the countries that faced the biggest shortages of emissions allowances, forcing industries there to go out shopping for more rights to pollute (EurActiv 06/05/09).
Last year saw the launch the second phase of the EU ETS, during which the number of EU allowances (EUAs) will be cut by 6.5%. The Commission stated that in light of the new data, the ETS had now finally started to fulfil its purpose of bringing down emissions of global warming gases.
A successful second trading phase of the ETS is crucial for December's international negotiations aiming at hammering out a post-Kyoto climate deal.
"The 3% reduction was partly due to businesses taking measures to cut their emissions in response to the strong carbon price that prevailed until the economic downturn started. It confirms that the EU has a well-functioning trading system, with a robust cap, a clear price signal and a liquid market, which is helping us to cut emissions cost-effectively," said EU Environment Commissioner Stavros Dimas.
As roughly half of the EU 27 ended up having to buy ETS credits last year, the Commission argued that the emission reductions were partially a result of installations investing in reduction activities. However, the onset of the recession has had a major impact on the ETS sectors, leading to lower emissions due to declining orders.
The downturn sent the robust carbon prices of last year plummeting in early 2009 as installations sold their surplus credits to raise capital (EurActiv 09/02/09). But they have since recovered amid a more optimistic economic outlook (EurActiv 15/05/09).
Barbara Helfferich, the European Commission's environment spokeswoman, said it was not possible to know exactly what proportion of the 3% cut was due to the ETS.
Nevertheless, she downplayed the impact of the economic crisis on the 2008 data. "Those figures were accumulated before the economic downturn when the price was rather high," she told journalists on Friday.
Offsets small
The emissions data also showed that companies did not make much use of the option to offset a part of their emissions via the international mechanisms set out in the Kyoto Protocol. Indeed, using credits from the Clean Development Mechanism (CDM) or the Joint Implementation (JI) mechanism became an alternative to cutting emissions domestically or buying EUAs for the first time last year.
The figures reveal, however, that EU installations decided to use only around 6% of the 1.4 billion credits available for the 2008-2012 trading period on international offsets in 2008. 41% of the CDM credits were generated by projects in China and almost a third in India.
Free allowances dominate
Overall, European power and industrial installations received 92% of their allowances for free last year. International offsets made up 3.9%, meaning only 4.1% of the allowances were either bought at auction or taken from 2009 allowances.
The Commission commended EU industries for their high level of compliance with the rules. It noted that less than 1% of mainly small companies participating in the ETS had failed to match their emissions with the required amount of allowances.
The EU has put its political weight behind the goal of creating an OECD-wide carbon market by 2015. As countries such as the US, Canada and Australia are engaged in debates over domestic emissions trading schemes, Commissioner Dimas said the emissions reductions in the EU industrial sector last year should "encourage other countries in their efforts to set up comparable domestic cap-and-trade systems".
