BRUSSELS/LONDON: Carbon dioxide emissions regulated under the EU’s emissions trading system (ETS) fell by 5% in 2024, driven by cuts in the power sector, the European Commission said on Friday.

Around 45% of the EU’s output of greenhouse gases is regulated by the EU ETS, which is the 27-nation bloc’s flagship scheme to tackle global warming by charging for the right to emit carbon dioxide (CO2).

It forces manufacturers, power companies and airlines to pay for the CO2 they emit by surrendering carbon allowances.

“ETS emissions are now around 50% below 2005 levels and on track to achieve the 2030 target of -62%,” the EU Commission said in a statement.

The largest fall was in the power sector, which saw a 12% drop in emissions compared with 2023 levels.

“This reduction is due to an increase in electricity production from renewables by 8% and nuclear by 5%, coupled with a decrease in gas by 8% and coal by 15%,” the Commission said.

Emissions from industry were stable, with a 5% cut in emissions from the cement sector offset by a 7% rise in the fertiliser sector.

Aviation sector emissions rose around 15%, which the Commission said was due to a broadening of geographical coverage with non-domestic flights included.

The ETS was expanded to include some maritime emissions last year, with 72 million tonnes of CO2 reported for 2024.

Benchmark prices in the EU ETS fell around 4.5% on Friday afternoon to €63 per metric tonne in line with sharp declines in other markets after China announced retaliatory tariffs on US goods, fanning global recession fears.

Prices have fallen around 25% since their peak this year in last January.