LONDON (Reuters) - Emissions capped by Europe’s carbon market fell 3.7 percent in 2014, driven by higher output from renewable power producers and lower electricity consumption, analysts at Thomson Reuters Point Carbon said on Wednesday.
Firms covered by Europe’s Emissions Trading System (ETS) emitted 1.838 billion tonnes of carbon dioxide equivalent (CO2e) in 2014 compared with 1.907 billion tonnes a year earlier, the analysts estimated in a research note.
Official data on last year’s emissions will be released by the European Commission on April 1. Participants in Europe’s carbon market will be eyeing the numbers, which give an indication of demand for carbon permits.
The drop was driven by a 6.7 percent decrease in emissions from the heat and power sector, to 1.025 billion tonnes of CO2e, the analysts said.
“Gas-fired power generation reversed the downtrend in recent years and replaced coal to some extent, as gas prices dropped amid warmer winter and bearish crude oil prices,” the analysts wrote.
Gas-fired power generation emits almost half the amount of carbon dioxide as coal–fired plants.
Meanwhile, last year was Earth’s hottest on record, two U.S. government agencies said in January.
An increase in production led to higher emissions from several industrial sectors, the analysts said.
Total emissions from industries covered by the ETS including cement, metals and power, rose by 0.5 percent to 813 million tonnes, they said.
The analyst figures did not include aviation emissions.
The EU’s ETS is the bloc’s flagship policy to cut greenhouse gas emissions by charging for the right to emit carbon dioxide.
Reporting by Susanna Twidale; Editing by Dale Hudson