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TRENDSEuropeanUnionEmissionsTradingSystem(EUETS)CHAPTER

01OverviewDistributionofcarbonmarketsizeworldwidein2022,bymarketBreakdownofglobalcarbonmarketsize2022,bymarketNorthAmerica(RGGI&WCI)7%UKETS5%Other**1%Europe(EUAs,aviationEUAs)*87%3Description:Theglobalcarbonmarketwasvaluedat865billionU.S.dollarsin2022.TheEuropeanUnion'sEmissionsTradingSystem(EUETS)wastheworld'slargestcarbonmarketthatyear,representing87percentoftheglobalcarbonmarketsize.TheUnitedKingdomETS,whichlaunchedin2021,accountedforthesecond-largestshareoftheglobalmarketvaluethatyear,atfivepercent.ReadmoreNote(s):Worldwide;2022;Basedonaglobalmarketvalueof864.9billionU.S.dollars;*VolumeincludesallowanceunitsforpilotETS,nationalETS,andCCERtransactions.Valueincludesonlyallowances.**OthermajormarketsincludeChina,[...]

ReadmoreSource(s):RefinitivEstimatedshareofselectedjurisdiction'sgreenhousegasemissionscoveredbyemissionstradingsystems(ETS)asof2023Shareofjurisdiction'sGHGemissionscoveredbyETS2023ShareofGHGemissionscovered0%10%20%30%40%50%60%70%80%90%100%NovaScotiaCaTQuebecCaT87%77%CaliforniaCaTSouthKoreaETSAlbertaTIER74%74%58%ChongqingpilotETSNewZealandETSKazakhstanETSOregonETS51%49%46%43%GuangdongpilotETSGermanyETS40%40%40%MexicopilotETSEUETS38%4Description:Theshareofemissionscoveredbyemissionstradingsystems(ETS)aroundtheworldvarieswidelybyjurisdiction.AsofMarch31,2023,theEUETScoveredroughly38percentofEUgreenhousegasemissions.Meanwhile,therecentlylaunchednationalETSinChinacoverednearly31percentofthecountry'stotalGHGemissions,orroughly4.5billionmetrictonsofcarbondioxideequivalent.Thismakesitthelargestcarbonmarketintheworldintermsofemissionscovered.

ReadmoreNote(s):Worldwide;2023;Basedon2021emissions;*RegionalGreenhouseGasInitiative(RGGI)isacooperativeeffortamongthefollowingstates:Connecticut,Delaware,Maine,Maryland,Massachusetts,NewHampshire,NewJersey,New[...]

ReadmoreSource(s):WorldBankShareofannualgreenhousegasemissionsworldwidecoveredbytheEuropeanUnionEmissionTradingSystem(EUETS)from2005to2023ShareofglobalGHGemissionscoveredbyEUETS2005-20235.0%4.5%4.0%3.5%3.0%2.5%2.0%1.5%1.0%0.5%0.0%20052006200720082009201020112012201320142015201620172018201920202021202220235Description:WhentheEuropeanUnionEmissionTradingSystem(EUETS)startedin2005itcovered4.41percentofglobalgreenhousegasemissions.In2005,theEUETSwastheonlyemissionstradingsystemintheworld.Itisnowestimatedtocover2.69percentofglobalemissions.Asof2023,carbonpricinginstruments,suchastheEUETS,covered23percentofglobalemissions.ReadmoreNote(s):Worldwide;2005to2023;AsofMarch31,2023Source(s):WorldBankAnnualgreenhousegasemissionsintheEuropeanUnion(EU-27)from1990to2021,bysector(inmillionmetrictonsofCO?equivalent)GreenhousegasemissionsintheEuropeanUnion1990-2021,bysectorEnergysupplyInternationalshippingTransportInternationalaviationIndustryWasteAgricultureOthercombustionResidential/commercial6,0005,0004,0003,0002,0001,00006Description:GreenhousegasemissionsintheEuropeanUnionhavedecreasedacrossmostsectorssince1990,withtheexceptionoftransportation.In2021,domestictransportationemissionsamountedto792MtCO?e–nearly18percenthigherthanin1990.Meanwhile,energysupplyemissionshavefallenapproximately44percentduringthisperiodtojustover900MtCO?e.ThereductioninenergysupplyemissionshashelpedcutEUannualGHGemissionsbyroughly32percent,relativeto[...]

ReadmoreNote(s):EU;1990to2021Source(s):EEACHAPTER

02AllowancesTotalallocatedallowancesandemissionsfromstationaryinstallationscoveredbytheEuropeanUnionEmissionsTradingSystem(EUETS)from2005to2022(inmillionmetrictonsofCO?equivalent)EUETStotalallocatedallowancesandemissions2005-2022TotalallocatedallowancesEmissions2,5002,0001,5001,00050002005200620072008200920102011201220132014201520162017201820192020202120228Description:In2022,thetotalsupplyofallocatedallowancesforallstationaryinstallationswas916.2millionmetrictonsofcarbondioxideequivalent(MtCO?e)–adecreaseofroughly103MtCO?ecomparedto2021.ThesupplyofEUfreelyallocatedallowanceswas543MtCO?ein2022.Stationaryinstallationsincludeinstallationssuchaspowerplants,refineries,andindustrialfactories.ReadmoreNote(s):EU;2005to2022;Onlyincludingstationaryinstallations,notincludingaviationSource(s):EEAAllowancesallocatedforstationaryinstallationsundertheEuropeanUnionEmissionsTradingSystem(EUETS)from2013to2022,bytype(inmillionmetrictonsofCO?equivalent)EUETSallowancesallocatedforstationaryinstallations2013-2022,bytypeFreelyallocatedallowancesAllowancesauctionedorsold(EUAsandEUAAs)2,5002,0001,5001,000500020132014201520162017201820192020202120229Description:In2022,theEUEmissionsTradingSystem(ETS)hadtotalallocatedallowancesatsome897.7millionmetrictonsofcarbondioxideequivalent(MtCO?e)forallstationaryinstallations.Thiswasadecreaseofsome10percentcomparedtothepreviousyear.Inparticular,freelyallocatedallowancesamountedtoover529MtCO?ein2022.TheEUEmissionsTradingSystemisacarboncreditmarketusedtomitigateclimatechange,andoneofthetoolstoreducegreenhousegasemissions.

ReadmoreNote(s):EU;2013to2022Source(s):EEAFreeallowancesforstationaryinstallationsallocatedundertheEuropeanUnionEmissionsTradingSystem(EUETS)in2022,bycountry(inmillionmetrictonsofCO?equivalent)FreelyallocatedallowancesforEUETSstationaryinstallations2022,bycountryAllowancesinMtCO?e020406080100120140GermanyFrance126.152.9SpainItalyPoland45.944.842.5NetherlandsBelgiumAustria38.429.118.8SwedenCzechiaRomaniaFinlandSlovakia16.815.614131310Description:GermanyhadthehighestEUEmissionsTradingSystem(ETS)freelyallocatedallowanceamongstallEuropeanUnionmemberstatesin2022,at126.1millionmetrictonsofcarbondioxideequivalent(MtCO?e)–a24percentshareofthetotalEUETS.Thatyear,theEUETS'sfreelyallocatedallowancestotaledsome543MtCO?e.Bycomparison,France'sfreelyallocatedallowancesaccountedfor10percentoftheEU'sallowances.TheEUEmissionsTradingSystemisacarboncreditmarket[...]

ReadmoreNote(s):EU;2022;Onlyincludingstationaryinstallations,notincludingaviationSource(s):EEAAllowancesauctionedorsoldforstationaryinstallationsundertheEuropeanUnionEmissionsTradingSystem(EUETS)in2022,bycountry(inmillionmetrictonsofCO?equivalent)EUETSallowancesauctionedorsoldforstationaryinstallations2022,bycountryAllowancesinMtCO?0102030405060708090GermanyPoland84.262.9SpainItaly4039.7France23Greece16.5NetherlandsBulgariaCzechiaPortugalBelgiumFinlandRomania14.113.78.48.38.26.36.111Description:ThevolumeofEuropeanUnionEmissionsTradingSystem(EUETS)allowancesauctionedorsoldin2022totaled373millionmetrictonsofcarbondioxideequivalent(MtCO?e).Thatyear,thelargestvolumeofcarbonpermitsauctionedorsoldwasinGermany,at84.2MtCO?e.ThiswasfollowedbyPoland,withatotalofnearly63MtCO?eofallowancesauctionedorsold.Oneallowance–orcarboncredit–givestheholdertherighttoemitonemetrictonofcarbondioxideorits[...]

ReadmoreNote(s):Europe,EU;2022;Onlyincludingstationaryinstallations,notincludingaviationSource(s):EEAAviationallowancesallocatedundertheEuropeanUnionEmissionsTradingSystem(EUETS)from2013to2022,bytype(inmillionmetrictonsofCO?equivalent)EUETSaviationallocatedallowances2013-2022,bytypeFreelyallocatedAuctioned6050403020100201320142015201620172018201920202021202212Description:ThesupplyofaviationallowancesissuedundertheEuropeanUnionEmissionsTradingSystem(EUETS)totaled27.2millionmetrictonsofcarbondioxideequivalent(MtCO?e)in2022.Ofthistotal,23.5MtCO?ewerefreelyallocatedand3.7MtCO?ewereauctioned.Oneallowance–orcarboncredit–givestheholdertherighttoemitonemetrictonofcarbondioxideoritsequivalent.ReadmoreNote(s):EU;2013to2022;EmissionscoveredundertheEUETSareonlyforflightswithintheEuropeanEconomicAreaSource(s):EEATotalsurrenderedunitsfromairlinesreportingundertheEuropeanUnionEmissionsTradingSystem(EUETS)from2012to2022(inmillionmetrictonsofCO?equivalent)EUETSsurrenderedunitsfromaviation2012-202212010810083806767636257604020049282502012201320142015201620172018201920202021202213Description:AirlinesreportingundertheEuropeanUnionEmissionsTradingSystem(EUETS)surrendered49millionunitsin2022.Eachunitisequivalenttoonemetrictonsofcarbondioxideequivalent.ReadmoreNote(s):EU;2012to2022Source(s):EEACHAPTER

03EmissionsVerifiedemissionsfromallstationaryinstallationsundertheEuropeanUnionEmissionTradingSystem(EUETS)from2005to2022(inmillionmetrictonsofcarbondioxideequivalent)EUETSverifiedemissionsfromallstationaryinstallations2005-2022VerifiedemissionsEstimatetoreflectcurrentETSscopeforallowancesandemissions3,0002,5002,0001,5001,000500020052006200720082009201020112012201320142015201620172018201920202021202215Description:GreenhousegasemissionsfromallstationaryinstallationscoveredbytheEuropeanUnionEmissionsTradingSystem(EUETS)decreased1.9percentin2022to1,331millionmetrictonsofcarbondioxideequivalent(MtCO?e).StationaryETSemissionshavedecreasedbyover44percentsincetheEUETSlaunchedin2005.ReadmoreNote(s):EU;2005to2022Source(s):EEAVerifiedemissionsundertheEuropeanUnionEmissionTradingSystem(EUETS)from2005to2022,byactivitysector(inmillionmetrictonsofcarbondioxideequivalent)VerifiedemissionsunderEUETS2005-2022,bysectorCombustionoffuelsAllindustrialinstallations(excl.combustion)Aviation*2,5002,0001,5001,000500020052006200720082009201020112012201320142015201620172018201920202021202216Description:CombustionplantswerethebiggestcontributortoemissionscoveredbytheEuropeanUnionEmissionsTradingSystem(EUETS)in2022,havingreleased821.5millionmetrictonsofcarbondioxideequivalent(MtCO?e).Combustionplantemissionsaccountedforroughly63percentoftotalverifiedemissionsfromstationaryinstallationscoveredbytheEUETS.ReadmoreNote(s):Europe,EU;2005to2022;*AviationhasbeenincludedintheEUETSsince2012.EmissionscoveredbyallcountriesparticipatingintheEUETS.ReadmoreSource(s):EEAGreenhousegasemissionsfromstationaryinstallationsintheEuropeanUnionundertheEmissionsTradingSystem(ETS)in2005and2022,bysector(inmillionmetrictonsofCO?equivalent)StationaryinstallationemissionsunderEUETS2005-2022,bysectorEmissionsinMtCO?e2022600200502004008001,0001,2001,4001,600CombustionCement&limeIron&steel,coke,metaloreRefineriesChemicalsOthernon-metallicmineralsPulp&paperOthermetal(inc.aluminum)17Description:CombustionplantswerethebiggestcontributortoemissionscoveredbytheEuropeanUnionEmissionsTradingSystem(EUETS)in2022,atapproximately821millionmetrictonsofcarbondioxideequivalent(MtCO?e).Thisaccountedforroughly63percentoftotalverifiedEUETSemissionsfromstationaryinstallations.Nevertheless,fuelcombustionETSemissionshavedecreasedbyroughly43percentwhencomparedto2005levels.

ReadmoreNote(s):EU;2005and2022Source(s):EEAVerifiedgreenhousegasemissionsundertheEuropeanUnionEmissionTradingSystem(EUETS)in2022,byselectactivity(inmillionmetrictonsofcarbondioxideequivalent)VerifiedemissionsunderEUETS2022,byselectactivityEmissionsinMtCO?e0100200300400500600700800900CombustionoffuelsRefiningofmineraloilProductionofcementclinkerProductionofpigironorsteelAviation82111510310349ProductionofbulkchemicalsProductionoflime,orcalcinationofdolomite/magnesiteProductionofpaperorcardboardManufactureofglass3026171713ProductionofammoniaManufactureofceramics12ProductionorprocessingofferrousmetalsProductionofprimaryaluminum10718Description:TheEuropeanUnionEmissionsTradingSystem(EUETS)coverstheemissionsfrommanyactivitiesacrosstheEU,suchascementproductionanddomesticaviation.In2022,fuelcombustionwasresponsibleforthehighestemissionsamongallactivitiescoveredbytheEUETS,at821millionmetrictonsofcarbondioxideequivalent(MtCO?e).TherefiningofmineraloilproducedthesecondhighestvolumeofETSemissionsthatyear,at115MtCO?e.

ReadmoreNote(s):EU;2022Source(s):EEAVerifiedgreenhousegasemissionsfromallstationaryinstallationscoveredbytheEuropeanUnionEmissionsTradingSystem(EUETS)in2022,bycountry(inmillionmetrictonsofcarbondioxideequivalent)EUETSemissionsfromallstationaryinstallations2022,bycountryEmissionsinMtCO?e050100150200250300350400GermanyPoland354184.1Italy136.3Spain96.3France83.1NetherlandsCzechiaBelgiumBulgariaGreece68.55739.733.931.628.226.622.6RomaniaAustriaNorway19Description:StationaryinstallationsinGermanyreportingundertheEuropeanUnionEmissionsTradingSystem(EUETS)emittedroughly354millionmetrictonsofcarbondioxideequivalent(MtCO?e)in2022.InstallationsinPolandfollowed,havingemittedover184MtCO?e.ManyofthemostpollutinginstallationsintheEUETSarecoal-firedpowerplantsthataremainlysituatedinGermanyandPoland.ReadmoreNote(s):EU;2022;Onlyincludingstationaryinstallations,notincludingaviationSource(s):EEACHAPTER

04FinancialsCarbontradingpricescoveredbyEmissionTradingSystems(ETS)worldwideasofMarch31,2023,byjurisdiction(inU.S.dollarspermetrictonofCO?equivalent)Pricesofcarbontradingworldwide2023,byjurisdictionPriceinU.S.dollarspertCO?e0102030405060708090100110EuropeanUnionSwitzerland96.393.81UnitedKingdomAlbertaNewfoundland&LabradorCanada88.1348.0348.0348.0348.0348.03SaskatchewanNewBrunswickNewZealandGermany34.232.6329.8429.84QuebecCaliforniaBritishColumbia18.4721Description:AsofMarch31,2023,theEuropeanUnionEmissionTradingScheme(EUETS)carbonpricewasabove96U.S.dollarspermetrictonsofcarbondioxideequivalent.TheEUETSlaunchedin2005asacost-effectivewayofreducinggreenhousegasemissions,andwastheworld'sfirstinternationalETS.TheUKwasformerlypartoftheEUETS,butreplacedthiswiththeUKETSafterwithdrawingfromtheEU.TheUKETSopenedfortradinginMay2021.ReadmoreNote(s):Worldwide;NominalpricesonMarch31,2023Source(s):WorldBankDailyEuropeanUnionEmissionTradingSystem(EU-ETS)carbonpricingfromJanuary2022toSeptember2023(ineurospermetricton)EU-ETSallowancepricesintheEuropeanUnion2022-2023110100908070605022Description:Thepriceofemissionsallowances(EUA)tradedontheEuropeanUnion'sEmissionsTradingScheme(ETS)reachedarecordhighof100.34eurospermetrictonofCO?inFebruary2023.AverageEUAspotpriceshaveincreasedsignificantlysincethe2018reformoftheEUETS.ReadmoreNote(s):EU;January2022toSeptember2023Source(s):Ember;IntercontinentalExchangeRevenuegeneratedbytheEuropeanUnionEmissionTradingSystem(EU-ETS)from2008to2022(inmillionU.S.dollars)EuropeanUnionEmissionTradingSystems(ETS)revenue2008-202245,00040,00035,00030,00025,00020,00015,00042,15234,32622,54815,94816,01110,0006,85020175,6394,98320134,21520163,40820145,00001,87920101,63220121,2952011464862008200920152018201920202021202223Description:EuropeanUnionEmissionTradingSystem(EU-ETS)revenuesreachedarecordhighof42.2billionU.S.dollarsin2022.Thisaccountedforroughlyhalfofglobalcarbonpricingrevenuesthatyear.EU-ETSrevenuesfromtheauctioningofallowanceshasincreasedconsiderablyinrecentyears.EUETSrulesstatethatMemberStatesshouldspendatleast50percentofauctioningrevenuesonclimateaction.ReadmoreNote(s):EU;2008to2022Source(s):WorldBankAuctioningrevenuesgeneratedundertheEuropeanUnionEmissionTradingSystem(EU-ETS)in2021,bycountry(inmillioneuros)EuropeanUnionEmissionTradingSystems(ETS)auctionrevenues2021,bycountryRevenueinmillioneuros01,0002,0003,0004,0005,0006,000PolandGermanyItaly5,593.65,306.22,520.92,482.9SpainFrance1,469.1Greece1,014.6NetherlandsBulgariaCzechiaBelgiumPortugalRomaniaFinland894832.9604533.2513.9483.940924Description:TheEuropeanUnionEmissionTradingSystem(EU-ETS)generatedauctioningrevenuesofapproximately25billioneurosin2021.PolandandGermanyaccountedforalmost45percentofrevenuesgeneratedfromauctioningEU-ETSallowancesthatyear,with5.6and5.3billioneuros,respectively.EU-ETSrulesstatethatMemberStatesshouldspendatleast50percentofauctioningrevenuesonclimateaction.ReadmoreNote(s):EU;2021Source(s):EEADistributionofEuropeanUnionEmissionsTradingSystem(EU-ETS)auctionrevenues(EU-27)in2021,byenduseBreakdownofauctionrevenueexpendituresharesfromEU-ETS2021,byenduseOtherclimate6.79%Greentransportation19.89%Billssupport34.85%Renewables11.95%R&D0.78%Energyefficiency17.03%Othernon-climate5.88%Internationalsupport0.1%Domesticcompensation2.00%25Description:Approximately20percentofauctioningrevenuesgeneratedundertheEuropeanUnionEmissionsTradingSystem(EU-ETS)wenttowardsgreentransportation.MemberStatesmustuseatleast50percentofauctioningrevenuesforclimate-andenergy-relatedpurposes.Some34percentofauctionrevenuesalsowenttowardscushioningtheimpactsoftheenergypricecrisisin2021.ReadmoreNote(s):Europe,EU;2021Source(s):Varioussources(EcoAct,ERCST,Reportnet)CHAPTER

05OutlookForecastaveragecarbonpermitpricesundertheEuropeanUnionEmissionsTradingSystem(EU-ETS)from2022to2025,bytradingsystem(ineurospermetrictonofCO?)EU-ETScarbonpriceforecasts2023-2025120104.8496.1910080604020086.1720232024202527Description:EuropeanUnionEmissionsTradingSystem(EU-ETS)carbonpermitsareforecasttoaverage86.17eurospermetrictonofcarbondioxidein2023,risingtomorethan100eurospermetrictonin2025.EU-ETScarbonpricessurpassedthe100eurospermetrictonthresholdforthefirsttimeinFebruary2023.ReadmoreNote(s):Worldwide;2023;BasedonaReuterssurveyofsevenindustryanalystsSource(s):Expert(s)(Industryanalysts);ThomsonReutersAveragecarbonpriceexpectationsworldwidefrom2022to2030,bytradingsystem(ineurospermetrictonofCO?)Averagecarbonpriceprojectionsworldwide2022-2030,bytradingsystemCarbonpriceineurospermetrictonofCO?2026-2030402022-20256002080100100120EUETSUKETS84.492.7379.2240.63ChinaETS27.6557.3152.69NewZealandETSSouthKoreaETSRGGI**4538.7939.2345.8332.251.54WCI(California-Quebec)GlobalEmissionOffsets(GEO)292028Description:Carbonpricesacrossmultipleemissionstradingsystemsworldwideareexpectedtoincreaseduringtheperiodof2026to2030,comparedto2022to2026.TheaverageEUETScarbonpriceisexpectedtobe84.4eurospermetrictonofCO?duringtheperiod2022to2025,butisprojectedtorisetoalmost100eurospermetrictonofCO?duringtheperiodof2026to2030,accordingtoasurveyofInternationalEmissionsTradingAssociationmembers.EUETScarbonpricingbrokethe90euros[...]

ReadmoreNote(s):Worldwide;April5toApril28,2