LONDON (Reuters) - Emissions from power plants and factories covered by the European Union’s carbon market fell by 1.4 percent last year, preliminary like-for-like data showed on Tuesday, helping keep the EU on track to reach its 2020 emissions reduction target.
Around 10,000 installations out of some 13,000 firms operating under the EU’s Emissions Trading System (ETS) reported carbon dioxide emissions of 1.79 billion tonnes in 2012.
Emissions fell for a second consecutive year on the scheme, which is the bloc’s main tool to fight climate change.
The 1.4 percent fall matched an average forecast from a Reuters poll of analysts published on March 12 yet views from the seven analysts varied widely, from a fall of 5.2 percent to a rise of 0.3 percent.
Many analysts foresaw a rise in power sector emissions because electricity demand increased last year and cheap coal and carbon prices meant many large emitters turned to coal to power their economies.
Yet Tuesday’s data showed a 0.4 percent decline in power sector emissions, and a larger, 3.9 percent fall in emissions from industrial sectors such as cement, glass and steel.
Market reaction to the data was muted. Carbon prices were down 2.9 percent at 4.67 euros per tonne at 1036 GMT, having recovered slightly from an inter-sessional low of 4.52 euros.
“Traders had no reason to expect surprises because the economic outlook and decrease in industrial production output were already priced in a long time ago,” a carbon trader said.
Among some of the biggest EU economies, Britain’s emissions rose 4.7 percent, France’s rose by 3.9 percent and Germany’s edged up 0.5 percent.
Poland was down 3.2 percent and Italy’s emissions fell by 5.7 percent.
Carbon permits are handed out to installations in each reporting year. Companies must surrender enough permits to cover their emissions by the end of April in the following year, otherwise fines can be imposed.
Prices have fallen almost 30 percent this year due to a growing oversupply of permits, exacerbated by weak demand amid an economic slowdown.
The European Commission’s preliminary emissions data published each April is watched by analysts and traders to estimate the balance of supply and demand for carbon permits and therefore prices. Final data is due for release on May 15.
Reporting by Andrew Allan, Michael Szabo and Nina Chestney; editing by Jason Neely