Emissions regulated by Europe's carbon market fell by 14.4 per cent in 2020, their biggest percentage decline yet, as pandemic restrictions stifled economic activity and grounded flights, official data examined by carbon analysts at Refinitiv showed, reports Reuters.
Around 45 per cent of the European Union's output of greenhouse gases is regulated by the Emissions Trading System (ETS), the bloc's flagship instrument to tackle global warming by charging for the right to emit carbon dioxide (CO2).
The Refinitiv analysts' interpretation of European Commission data found emissions covered by the ETS totalled 1.365 billion tonnes of CO2 equivalent (CO2e), down 14.4 per cent on the previous year.
The fall was the largest in percentage terms since the market was launched in 2005.
The market does not cover emissions from agriculture or transport beyond the aviation sector.
"The substantial drop in emissions is the fallout from the pandemic with economic activity shrinking last year and renewables displacing fossil-fired power," Refinitiv analyst Ingvild Sorhus said.
With international travel restricted, aviation sector emissions dived 58.4 per cent to 25.8 million tonnes CO2e.
After aviation, the heat and power sector, whose emissions totalled 632.8 million tonnes of CO2e, down 17.1 per cent in 2019, registered the next steepest fall.
Stationary emissions covered by the scheme, such as from power plants and factories, totalled 1.339 billion tonnes of CO2e, down 12.6 per cent from the previous year, the data showed.
The figures were in line with analysts forecasts and the benchmark price of carbon permits in the ETS was little changed on Thursday at around 42.50 euros a tonne.
Carbon prices have been rising since the European Union agreed last year to toughen its climate targets, which will increase demand for permits to emit, and hit a record high of 43.77 euros/tonne last month