Tuesday, August 16, 2022

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GHG emissions are decreasing, while GDP is growing

The European Commission announced its annual EU Climate Action Progress Report, which includes the progress of cutting greenhouse gas (GHG) emissions in the EU. Thanks to all the efforts done, emissions decreased by 3.7 per cent in 2019, while GDP grew by 1.5 per cent. Overall, it means a reduction of 24 percentage points compared to 1990 levels.

According to the EU’s Emissions Trading System (EU ETS), within the last years, 2019 showed the greatest reduction in GHG emissions. To put it into context that means a 9.1 per cent drop (equivalent with 152 million tonnes of carbon dioxide) compared to 2018. The main drop can be observed in the power sector, where emissions fell by almost 15 per cent, primarily due to coal-fired electricity production being replaced by electricity production from renewables and gas. Another two per cent comes from industrial emissions. Verified emissions from aviation, which currently only cover flights within the European Economic Area, continued to grow by one per cent, compared to 2018. Emissions that are not covered by the EU ETS, such as those from non-ETS industry, transport, buildings, agriculture and waste, saw no significant change compared to 2018 levels.

“The European Union is proving it is possible to reduce emissions and grow your economy,” said Frans Timmermans, Executive Vice-President for the European Green Deal. “However, today’s report again confirms we need to step up our efforts across all sectors of the economy to reach our common goal of climate neutrality by 2050. The transition is feasible if we stick to our commitment and seize the opportunities of the recovery to reboot our economy in a greener, more resilient way and create a healthy, sustainable future for all.”

If we take a look at the Central and Eastern European region, we can see that GHG emissions decreased everywhere: in Croatia by 17 per cent, in the Czech Republic by 12 per cent, Estonia achieved a meaningful 20 per cent, Hungary made it by 16 per cent, while Poland’s emission decreased only by 3 per cent. On the other hand, Romania has an astonishing 26 per cent and Slovakia achieved a 16 per cent drop, just like Slovenia.

There will be another financial hint for the CEE region: the Modernisation Fund will support low-carbon investments in the power sector and wider energy systems of ten CEE Member States listed in the ETS Directive. Moreover, five eligible Member States decided to transfer additional allowances to the Modernisation Fund. As a result, 643 million allowances will be available from 2021 to 2030. Beneficiary Member States will be responsible for the selection, financing and reporting of investments, and must comply with applicable State aid rules.

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