President Dirk Messner of UBA said, “In 2020, we once again took a big step forward in climate action. As in previous years, the relative decline in emissions in the emissions trading sector is clearly greater than the decline in total national emissions. The pandemic effect is making itself felt in this very special year and, particularly in the industrial sector, the decrease in emissions is unlikely to be sustainable. This is where we urgently need further efforts and an ambitious decarbonisation strategy. We can evidence that climate policy is already having an effect above all in the energy sector, where the coal phase-out is making very good progress. The 2018 reform of the European Emissions Trading Scheme, which led to far higher CO₂ prices, is also making itself felt on this front. This success encourages us to tackle the major task of aligning emissions trading with the new European climate protection target for 2030."
Jürgen Landgrebe, Head of Division V Climate Protection, Energy, German Emissions Trading Authority at UBA said, “The end of the third trading period of emissions trading in 2020 marks a reduction of around 43% compared to the base year 2005 in the sectors included at the European level. Current emission levels are already in line with the valid target for 2030, which underlines the large scope for increasing ambition in the EU ETS. We must take quick resolute action and lower the emission caps in the EU ETS for the period up to 2030. Emissions trading can and will then become the central cornerstone of European climate policy in this decisive decade for the protection of our climate.”
Energy: In 2020, the emissions of German energy installations decreased by about 15 percent, to 207 million tonnes of CO2. This thus accelerates the downward trend in the sector of the previous year. The main factor behind the decline was the decrease in hard coal and lignite emissions in 2020. According to data from the Working Group on Energy Balances, the shares of lignite and natural gas in 2020 reached 16% for the first time whereas hard coal had a share of only about 7%.
Industry: Emissions from energy-intensive industry in Germany fell by 5% compared to the previous year to 114 million tonnes CO₂-eq. This marks the second time in a row that emissions have fallen significantly since the start of the third trading period. The biggest decreases were in the iron and steel industry (-12%), followed by industrial and building lime (-7%). Decreases in the other sectors (paper and pulp industry, non-ferrous metals industry, refineries) ranged between minus 2 and minus 3%. The decreases in emissions in these industries mainly result from declining production volumes compared to the previous years. Emissions from cement clinker production remained more or less unchanged, as in 2019. The same is true for emissions from the chemical industry.
Aviation emissions: 2020 emissions from Germany’s aircraft operators amounted to approx. 4 million tonnes CO2, or a 58% decrease over the previous year. The main cause is the steep decline in air travel during the COVID-19 pandemic.
Germany and Europe: Emissions from all installations participating in the EU ETS (in the 27 EU Member States and the United Kingdom, Iceland, Liechtenstein, Norway) fell in 2020 to a similar extent as in Germany. The European Commission reports that emissions in 2020 fell by 11% compared to the previous year and amounted to around 1.33 billion tonnes of CO₂-eq. As in Germany, the main reason for this development was a fall in emissions from electricity generation (-15% throughout Europe) although emissions from industrial plants also fell by 7% due to the pandemic. Compared to 2005, EU ETS emissions fell by about 43% across Europe, even more than in Germany, where they fell by about 38%. The European climate target for the sectors covered by the EU ETS (- 21% in 2020 compared to 2005) is thus clearly exceeded. Current emission levels are already in line with the currently valid target for 2030, which clearly underscores the large scope for increasing ambition in the EU ETS.
Emissions trading and total emissions: The relative decline in emissions in the emissions trading sector is greater than the decline in total German greenhouse gas emissions. UBA's March estimate for the previous year shows a decline of some 70 million tonnes of CO2eq (– 8.7%). With the data now available from DEHSt, a preliminary calculation for 2020 can be made of German emissions that are outside the scope of EU ETS. The data indicates that Germany's emissions subject to the European effort sharing procedure exceeded the allocated emission allowances for 2020 by around 7.4 million tonnes CO2eq. The cumulative deficit in for the entire trading period (2013-2020) is estimated to be about 22.3 million tonnes CO₂. The Effort Sharing Decision in the EU allows Member States to offset any deficit by purchasing emissions allowances (flexibility mechanism).
Further information
The German Emissions Trading Authority (DEHSt) is the national authority entrusted with the implementation of the EU emissions trading scheme. Its mandate includes allocation and issuance of free emission allowances, reviewing emissions reports and monitoring plans, and administration of accounts in the EU emissions trading registry. DEHSt operates auctioning and informs the public and market participants of its results. It is in charge of the administration of the project-based mechanisms Joint Implementation and Clean Development Mechanism. The Authority also acts as the national licensing authority for the payment of state aid for electricity-intensive companies to offset indirect CO2 cost (electricity price compensation). DEHSt is also responsible for implementing the national emissions trading scheme for fuels launched in 2021.
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