Carbon Reduction Activities in Europe: December 2024
Executive Summary: Recent announcements in Europe highlight significant strides in carbon reduction efforts. The European Commission has introduced new measures to enhance the EU Emissions Trading System (EU ETS) and expand its scope to include additional sectors. These initiatives are part of the broader European Green Deal, aiming to achieve climate neutrality by 2050.
Introduction
Between December 9, 2024, and December 15, 2024, several key developments were announced in Europe regarding carbon reduction activities. These initiatives are part of the European Union’s ongoing efforts to combat climate change and transition towards a sustainable, climate-neutral economy by 2050.
Key Announcements
1. Expansion of the EU Emissions Trading System (EU ETS)
The European Commission has announced plans to expand the scope of the EU Emissions Trading System (EU ETS) to include additional sectors. This expansion is part of the ‘Fit for 55’ legislative package, which aims to reduce net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. The EU ETS will now cover emissions from maritime transport and will see a reduction in free allowances for the aviation sector by 25% in 2024. Additionally, new rules for monitoring and reporting non-CO2 effects of aviation will be implemented from 2025.
Source: European Commission
2. REPowerEU Plan and Auctioning of Allowances
The European Commission has communicated the volumes of allowances to be auctioned for the REPowerEU plan, which aims to tackle climate change, advance the clean energy transition, and address energy poverty. A total of 86,685,000 allowances will be auctioned in 2025, with an additional 58,000,000 allowances in 2026. The decision to adjust these volumes for the period from September 2025 to August 2026 will depend on price evolution and will be communicated in July 2025.
Source: European Commission
3. Revenue from EU ETS
In 2023, the EU ETS generated EUR 43.6 billion in revenue, which was distributed primarily to national budgets of Member States to tackle climate change. The revenue also supported the ETS Innovation Fund, the ETS Modernisation Fund, and the Resilience and Recovery Facility for the REPowerEU plan. The total revenue raised by the EU ETS to date exceeds EUR 200 billion.
Source: European Commission
4. Legislative Developments
The European Commission has completed key legislative work under the ‘Fit for 55’ package, which includes revisions to the EU ETS, Effort Sharing Regulation, and Land Use, Land Use Change and Forestry Regulation. These revisions align with the updated 2030 climate target to reduce net greenhouse gas emissions by at least 55% compared to 1990 levels, as set out in the European Climate Law.
Source: European Commission
Conclusion
The recent announcements reflect Europe’s commitment to reducing carbon emissions and achieving climate neutrality by 2050. The expansion of the EU ETS, the REPowerEU plan, and the legislative developments under the ‘Fit for 55’ package are crucial steps towards a sustainable future. These initiatives demonstrate the EU’s leadership in global climate action and its dedication to meeting the targets set out in the European Green Deal.
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