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EU carbon market emission drop by 5% in 2024 on track to 2030 target

The European Commission announced on Friday that carbon dioxide emissions under the EU's emissions trading scheme (ETS), which regulates the emissions of greenhouse gases, will fall by 5% by 2024 due to reductions in the electricity sector.

The EU ETS regulates around 45% of the greenhouse gas emissions of the European Union. It is the flagship program of the 27-nation EU to combat global warming through charging for the rights to emit CO2.

Carbon allowances are a way for manufacturers, power companies, and airlines to pay the carbon they emit.

The EU Commission stated that "ETS emission levels are now about 50% below 2005 and on track to reach the 2030 target of 62%."

The biggest fall in emissions was seen in the power sector. Emissions dropped by 12% compared to 2023 levels.

The Commission stated that "This reduction was due to a rise in electricity production by renewables of 8%, nuclear by 5% and a decline in coal and gas by 8%."

The emissions from industry were stable. A 5% reduction in the cement sector was offset by an increase of 7% in the fertilizer segment.

The Commission attributed the increase in aviation sector emissions to an expansion of geographic coverage, including non-domestic flight.

Last year, the ETS was extended to include maritime emissions with 72 million tonnes of CO2 being reported by 2024.

Benchmark prices for the EU ETS dropped around 4.5% to 63 Euros per metric ton on Friday afternoon, in line with sharp drops in other markets following China's announcement of retaliatory duties on U.S. products, fueling global recession concerns.

Prices have dropped by around 25% from their peak in January of this year. (Reporting from London by Susanna Twiddale, additional reporting by Sudip K-Gupta, Bart Meijer and Alex Richardson; editing by Alex Richardson and Franklin Paul).

(source: Reuters)