* Analysts see emissions growth of 0-2.4 pct last year
* EU still on course to meet 2020 emissions target
By Nina Chestney
LONDON, Feb 27 European Union industrial
carbon emissions rose by up to 2.4 percent last year, analysts
surveyed by Reuters estimated, below the market cap and keeping
the 27-nation bloc on track to meet its 2020 climate target.
The EU's emissions trading scheme (ETS) limits the emissions
of over 12,000 installations, including power plants and
factories, and covers over 40 percent of the 27-nation bloc's
The EU Commission publishes emissions data for the scheme in
April each year, which is watched by analysts and traders to
estimate the balance of supply and demand for permits called EU
Allowances, and therefore prices.
Analysts already estimate that emissions rose last year by
between 0 and 2 percent, based on their calculations for 2010
emissions. Final official EU data last May showed emissions rose
3.2 percent in 2010.
"We expect a slight rise of 1.6 percent due to a reduction
in industrial production in the fourth quarter last year, milder
weather and heavy investment in renewables," said Trevor
Sikorski, head of carbon research at Barclays Capital.
Total EU industrial production rose over the first 10 months
of 2011 but was softer in the fourth quarter as the effects of
the EU sovereign debt crisis and weak financial markets hit.
Societe Generale's Emmanuel Fages forecast a 2.4 percent
increase, while Nomisma Energia's Matteo Mazzoni saw 2 percent.
EU industry's emissions were capped at 1.995 billion tonnes
in 2011, according to Thomson Reuters Point Carbon analysts.
"The figure we have right now sees a 2 percent rise
year-on-year with 1.98 billion tonnes of CO2 last year - an
increase which outstripped the slowdown in industrial production
recorded in the second half of last year," Mazzoni said.
The increase was mainly due to greater fossil fuel
generation in Germany, Britain, Spain and Poland based on
regulatory changes, he added.
Germany decided to phase out nuclear power last year, which
increased its reliance on fossil fuels, while Spain introduced
controversial subsidies for coal-based power generation.
However, another analyst saw emissions as flat in 2011.
Ingo Tschach, managing director of Tschach Solutions,
estimates emissions inched down by 0.15 percent, as some EU
nations relied more on nuclear power and others on renewables.
"Solar exploded in terms of capacity development while more
offshore wind came on line as well. You have to remember that we
still have relatively high coal prices at over $100 which has
given incentives to industry to invest in energy efficiency."
Last week, UK coal-fired power generator Drax and UK utility
Centrica said they spent less on carbon permits last year as
reliance on renewables increased.
The EU aims to cut greenhouse gas emissions 20 percent from
1990 levels by 2020. Emissions last year were already down 17
percent on 1990 and increased energy efficiency should mean the
EU can achieve a 25 percent reduction by 2020, the Commission
The bloc has offered to go to 30 percent if other countries
commit to deeper cuts as part of a global climate deal.
This year, the Commission forecasts economic output in the
17 nations sharing the euro will contract further, which will
likely dampen emissions growth.
The euro zone was last in recession in 2009 when the
economy contracted 4.3 percent during the deepest global slump
since the 1930s. As a result, EU ETS emissions fell 11.6 percent
that year to 1.872 billion tonnes of carbon dioxide.