Greenhouse gas emissions under the EU’s Emissions Trading System (ETS) have fallen by nearly 50 percent since 2005, according to new data from the European Commission. Despite a volatile policy landscape and mixed sectoral progress, the figures offer strong evidence that the EU’s flagship cap-and-trade programme is delivering long-term climate results. Moreover, it is reinforcing the importance of aligning business sustainability strategies with regulatory frameworks like the ETS. Keep reading as we share the findings of this recent report.
Power sector drives down emissions
The most significant contributor to this reduction has been the power sector, where emissions dropped 12 percent in 2024 alone. This decarbonisation was fuelled by a major shift in Europe’s energy mix:
- Electricity from renewables increased by 8 percent, driven by a 19 percent surge in solar generation and gains in hydropower.
- Nuclear power rose by 5 percent.
- Electricity from coal and gas declined by 15 percent and 8 percent, respectively.
This signals the EU’s accelerating move away from fossil fuels, even as total electricity production remained stable year-on-year.
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Industrial emissions hold steady
While the power sector saw meaningful cuts, industrial emissions were largely stable, with variation across sub-sectors:
- Cement sector emissions fell by 5 percent, mirroring a 5 percent dip in production.
- Fertiliser sector emissions rose by 7 percent, reflecting a 6 percent production recovery.
These shifts suggest that emissions in energy-intensive industries are still closely tied to output rather than deeper operational transformation, indicating an opportunity for broader adoption of cleaner industrial processes.
Aviation emissions climb and maritime sector reporting begins
Aviation emissions, by contrast, rose 15 percent in 2024. This was partly due to the expanded scope of the ETS, which now includes non-domestic flights to and from the EU’s outermost regions. The increase, however, also signals a rebound in aviation activity and raises questions about the sector’s trajectory without stronger decarbonisation measures.
2024 also marked a milestone for the maritime industry, as companies reported their emissions under the ETS for the first time. As of April 2025:
- 72 million tonnes of CO₂ were reported in the maritime registry.
- 40 million tonnes have already been reflected in the EU ETS Registry.
This reporting builds on the existing MRV (monitoring, reporting, verification) framework and could pave the way for stronger maritime decarbonisation efforts. However, disruptions such as the Red Sea crisis affected traffic patterns, complicating early emissions analysis.
Overall, Emissions Trading Systems (ETS) emissions fell 5 percent in 2024, continuing a steady downward trend that places the system on track to hit its 2030 goal of a 62 percent reduction. The European Commission praised the system’s performance, stating the ETS remains an “effective and efficient” policy tool for driving decarbonisation.
However, not all sectors are progressing equally, and volatility in aviation and maritime emissions reminds us that inclusion in the ETS is only the first step. With the EU ETS expanding to cover more sectors and regions, the complexity of implementation and enforcement will only grow.
Conclusion – A model for global carbon markets?
The ETS results deliver an encouraging message at a time when global climate ambition is under pressure. While regulatory delays and political uncertainty are creating confusion elsewhere, the EU’s emissions trajectory offers proof that long-term, market-based mechanisms can deliver measurable impact.
Still, this is no time for complacency. The aviation sector’s emissions rise and industry stagnation show that momentum can easily stall. To keep pace with its 2030 and 2050 climate targets, the EU must maintain the integrity of the ETS but also complement it with deep sectoral reforms and accelerated investment in clean technologies.
For businesses, the message is clear: those that prioritise decarbonisation today will be the ones that lead tomorrow. Building internal capability across teams is essential for navigating compliance, driving innovation, and ensuring long-term competitiveness in a low-carbon economy. Explore our sustainability courses online to equip your people with the knowledge and skills needed to take meaningful climate action.
