Trends and projections in the EU-ETS in 2025, the EU Emissions Trading System in numbers

ETC CM Report 2025/06 Trends and projections in the EU-ETS in 2025 The EU Emissions Trading System in numbers Authors: Christian Nissen, Johanna Cludius, Sabine Gores, Reena Skribbe, Nora Wissner (Öko-Institut) EEA project manager: Melanie Sporer Cover design: EEA Cover image: Pixabay. Free for commercial use, no attribution required Publication Date: December 2025 EEA activity: climate change mitigation and adaptation Legal notice Preparation of this report has been funded by the European Environment Agency as part of a grant with the European Topic Centre on Climate change mitigation (ETC-CM) and expresses the views of the authors. The contents of this publication do not necessarily reflect the position or opinion of the European Commission or other institutions of the European Union. Neither the European Environment Agency nor the European Topic Centre on Climate change mitigation is liable for any consequence stemming from the reuse of the information contained in this publication. ETC CM coordinator: Vlaamse Instelling voor Technologisch Onderzoek (VITO) ETC CM partners: AETHER Limited, Citepa, Czech Hydrometeorological Institute (CHMI), EMISIA, Stiftelsen NILU (NILU), ÖkoInstitut e.V. Institut für Angewandte Ökologie, Öko-Recherche GmbH - Büro für Umweltforschung und -beratung, Rijks Instituut voor Volksgezondheid en Milieu (RIVM), Gauss International Consulting S.L., Transparency for life (T4L), Klarfakt e.U., Exergia S.A., Transport & Mobility Leuven (TML), Umweltbundesamt GmbH (UBA). Copyright notice © European Topic Centre on Climate change mitigation, 2024 Reproduction is authorized provided the source is acknowledged. [Creative Commons Attribution 4.0 (International)] DOI: 10.5281/zenodo.17967837 (from Zenodo) More information on the European Union is available on the Internet (http://europa.eu). European Topic Centre on Climate change mitigation https://www.eionet.europa.eu/etcs/etc-cm [email protected] ETC-CM Report 2025/06 1 Contents Contents ........................................................................................................................................................ 1 Summary........................................................................................................................................................ 3 About this report ....................................................................................................................................... 3 Main findings ............................................................................................................................................. 3 1 Overall EU ETS1 Developments ............................................................................................................. 5 1.1 Emission Trends in the EU ETS1 .................................................................................................... 5 1.2 Development of CO₂ Prices in the EU ETS1 ................................................................................... 6 1.3 Supply of allowances ..................................................................................................................... 8 1.3.1 Auctioned allowances and MSR intake ................................................................................. 8 1.3.2 Free allocation ....................................................................................................................... 9 1.3.3 Supply and demand for allowances and impact on the allowance price ............................ 10 1.3.4 The Market Stability Reserve............................................................................................... 11 1.4 Linking of the EU ETS1 with other emission trading systems...................................................... 12 1.4.1 Swiss Linking ........................................................................................................................ 12 1.4.2 UK Linking ............................................................................................................................ 13 2 Sector-specific Analysis ....................................................................................................................... 14 2.1 Stationary Installations ................................................................................................................ 15 2.1.1 Combustion ......................................................................................................................... 16 2.1.2 Industry ................................................................................................................................ 23 2.2 Transport under the EU ETS1 ...................................................................................................... 29 2.2.1 Aviation ................................................................................................................................ 30 2.2.2 Maritime .............................................................................................................................. 34 3 Projections and Policy Impacts ............................................................................................................ 38 3.1 Stationary .................................................................................................................................... 38 3.1.1 Overview .............................................................................................................................. 38 3.1.2 Projection methodology and scenario updates .................................................................. 40 3.1.3 Emission trends by country ................................................................................................. 41 3.1.4 Emission trends by sector .................................................................................................... 43 3.2 Aviation ........................................................................................................................................ 44 3.2.1 Overview .............................................................................................................................. 44 3.2.2 Emission trends ................................................................................................................... 44 3.3 Maritime Transport ..................................................................................................................... 46 3.3.1 Overview .............................................................................................................................. 46 3.3.2 Emission trend ..................................................................................................................... 46 4 Focus Topic: EU ETS2 ........................................................................................................................... 49 ETC-CM Report 2025/06 2 Overview .................................................................................................................................................. 49 4.1 Emission trends ........................................................................................................................... 52 List of abbreviations .................................................................................................................................... 54 References ................................................................................................................................................... 55 Annex 1 ........................................................................................................................................................ 58 ETC CM Report 2025/06 3 Summary About this report The annual ‘Trends and projections in the EU ETS’ report provides an overview of the development of the European Emissions Trading System (EU ETS1) since 2005 and up to 2024. It documents key trends in emissions, allowance prices, supply-demand dynamics, as well as sectoral developments and projections. An overview of the upcoming EU ETS2 system is also presented. All historical ETS data used in this report are based on a snapshot from the Union Registry dated 04 November 2025. At this point in time, the data precede the full compliance cycle, which may lead to minor revisions in later releases. Based on EU Member States’ emissions projections, it also gives and outlook on projected future developments until 2050. The geographical scope covers all EU ETS Member States, including the EU-27, as well as Iceland, Norway, and Liechtenstein. Although the United Kingdom (UK) has left the EU ETS1, electricity generators in Northern Ireland remain part of the system and are therefore included in this report. Main findings Total EU ETS1 emissions increased from 1,150 Mt CO₂-eq in 2023 to 1,185 Mt CO₂-eq in 2024. This rise is largely attributable to the inclusion of maritime transport in the scope of the EU ETS1 together with growth in emissions from air transport. For maritime transport, 89.9 Mt CO₂ were reported for the first time. Emissions from stationary installations declined significantly (-6 %), while aviation emissions grew (+15 %) as air traffic nearly approached pre-pandemic levels. Allowance prices experienced a downward correction after the record high price levels of recent years. The average price of EU allowances (EUAs) stood at EUR 64.8/t CO₂-eq in 2024, compared with EUR 83.6/t CO₂-eq in 2023. Aviation allowances (EUAAs) followed a similar trend. The decline reflects weaker economic conditions, the easing of natural gas prices and the continued expansion of renewable energy, while price signals continue to provide strong decarbonisation incentives. The supply of allowances in the EU ETS1 increased in 2024 due to higher auction volumes following the inclusion of maritime transport. At the same time, free allocation to industrial installations decreased further to 500 million allowances (-7 % compared to 2023). For the first time, the revised ETS framework triggered the automatic cancellation of surplus allowances in the MSR above the 400 million threshold. The Market Stability Reserve (MSR) absorbed 271 million allowances and remained a key market balancing mechanism. The sectoral analysis shows that emissions from power generation fell further due to declining fossil fuel use and the continued expansion of renewables, while industrial emissions remained broadly stable. Aviation increasingly relied on emission allowances from the stationary and maritime sectors as the emissions cap for aviation is significantly lower than emission from these sectors. The maritime transport sector entered the system and started with full auctioning, though only 40 % of emissions from this sector were subject to surrender obligations in 2024. Projections submitted by Member States indicate a continued decline of stationary EU ETS1 emissions until 2030. Under the WEM scenario (with existing measures), reductions of about 61.7 % compared to 2005 are expected, while under the WAM scenario (with additional measures) reductions may reach up to 65.3 %. For the first time aviation emissions are projected to decrease from 2030, while maritime transport is expected to record a moderate decline in emissions. The EU ETS1 2030 target of a 62 % reduction therefore appears achievable. ETC-CM Report 2025/06 4 The report also covers the introduction of EU ETS2 for buildings and road transport. This new system entered a transitional phase in 2024. A recent Council decision and European Parliamentary vote make it likely that the start of the system will be postponed to 2028. The EU ETS2 is based entirely on auctioning and will be complemented by the Social Climate Fund, which will become operational in 2026 and receive its first financing from EU ETS1 revenues in 2025. Overall, the results confirm that the EU ETS remains a cornerstone of European climate policy. Its scope has been significantly expanded through the inclusion of additional sectors and the creation of EU ETS2. The projections indicate that the 2030 target is within reach, while further adjustments will be necessary to secure the trajectory towards climate neutrality by 2050. ETC-CM Report 2025/06 5 1 Overall EU ETS1 Developments 1.1 Emission Trends in the EU ETS1 Figure illustrates the development of verified emissions covered by the EU ETS1 from 2005 to 2024, disaggregated by stationary installations (including estimates for scope adjustments), aviation, maritime transport and emissions from the United Kingdom until 2020 1 . Scope -adjustments are reflecting the expansion of the ETS scope over time for new countries, sectors and gases and ensuring comparability and consistency across the time-series 2 . During the first and second trading periods (2005-2012), emissions were dominated by stationary installations, with verified emissions of approximately 2,093 Mt CO₂‑eq in the initial years. Aviation was included in the EU ETS1 in 2012, initially with a limited scope. From the third trading period onwards (2013–2020), aviation emissions became an established part of the EU ETS1, initially contributing modestly but increasing steadily over time. The fourth trading period (2021-2030) reflects significant changes, such as the inclusion of maritime transport (starting in 2024) and the withdrawal of the United Kingdom 3 from the EU ETS1. 1 An exception are electricity-generating installations in Northern Ireland that are still part of the ETS1. 2 Scope‑adjustment estimates (“estimate to reflect current scope”) are included to ensure comparability across trading periods 3 An exception are electricity-generating installations in Northern Ireland that are still part of the ETS1. Key messages: • Total stationary verified EU ETS1 emissions declined strongly from nearly 2,093 Mt CO₂-eq in 2005 to around 1,033 Mt CO₂-eq in 2024 (-51%), with the long-term downward trend driven by climate policies, the growing share of renewable energy in power generation and the ongoing industrial decarbonization. • The apparent increase in total verified EU ETS emissions between 2023 and 2024 (+3%) reflects the inclusion of maritime transport, which contributed 89.9 Mt CO₂ in its first year of coverage, rather than a reversal of the long-term decline. • In 2024, the downward trend in emissions from stationary installations continues (-6%), albeit at a slower rate than in 2023, while aviation emissions continue to rise (+15%) as air traffic approached pre-pandemic levels. • EUA prices reached historic highs in 2021-2023 before correcting to an annual average of EUR 64.8/t CO₂ in 2024. Despite the decline, price levels remain well above pre-2021 values and continue to provide strong decarbonisation incentives. • Auction volumes rose to 497 million allowances in 2024, mainly due to the maritime extension, while free allocation fell to 500 million allowances (-7 % compared to 2023), continuing the longterm downward trend. • The Market Stability Reserve (MSR) absorbed 271 million allowances in 2024. For the first time, the new cancellation rule reduced the MSR holdings to the legal maximum of 400 million allowances, resulting in the invalidation of 271 million units. ETC-CM Report 2025/06 6 Overall, emissions from stationary installations exhibit a clear downward trend across all periods, reflecting the impact of enhanced climate policies, the transition to renewable energy sources and an ongoing decarbonisation in industry. The scope‑adjusted estimates allow for a consistent comparison of historical emissions with the current coverage of the EU ETS1 in its fourth trading period. Between 2023 and 2024, total verified emissions reported under the EU ETS1 increased from 1,150 Mt CO₂-eq to 1,185 Mt CO₂-eq. This apparent rise does not reflect a reversal of the long-term downward trend but is largely explained by the extension of the EU ETS1 scope to include maritime transport from 2024 onwards. Maritime activities added a substantial new source of emissions. In addition, aviation emissions rose slightly in 2024 as air traffic recovered to near pre-pandemic levels, while emissions from stationary installations continued their significant decline. Figure 1-1 Verified Emissions: EU ETS1 (2005–2024) Note: The estimate to reflect current scope takes into account emissions (not split by activity) for those countries, sectors and activities that have not been part of the EU ETS1 since its inception in order to provide a consistent time series. Emissions from the United Kingdom exclude electricity generators in Northern Ireland but include other ETS1 installations located there. Electricity generators from Northern Ireland are included under the ‘Stationary' category. Source: EEA (2025b) 1.2 Development of CO₂ Prices in the EU ETS1 During the first two trading periods (2005-2007 and 2008-2012), EU Allowances (EUA) prices were volatile and generally low. Phase 1 (2005-2007) saw prices rise above EUR 30/t CO₂ in 2006 but drop to near zero in 2007 due to oversupply and the fact that allowances could not be banked into Phase 2 and lost validity at the end of this first ‘trial phase’ in 2007. In Phase 2 (2008-2012), prices ranged between EUR 10 and EUR 20/t CO₂ before falling below EUR 7/t CO₂ by 2012 amid the global financial crisis and surplus allowances. In addition to the economic downturn, the extensive use of international Kyoto credits (CERs and ERUs) during Phase 2 increased the supply of units and further suppressed allowance prices (see EEA 2019, p. 23). 0 500 1,000 1,500 2,000 2,500 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Verified Emissions (Mt CO2-eq.) Stationary Estimate to reflect current scope Aviation Verified Emissions Maritime UK incl. scope estimate ETC-CM Report 2025/06 7 Figure 1-2 Development auf CO2 Prices in the EU ETS1 (2005–2024) Source: EEX (2025), ICE (2021) Between 2013 and 2017, EUA prices remained at a relatively low level. The average price in 2013 was EUR 4.33/t CO₂-eq, increasing moderately to EUR 5.76/t CO₂-eq by 2017. This phase was characterised by a structural surplus of allowances resulting from the economic recession and the extensive use of international credits. The introduction of the Market Stability Reserve (MSR) in 2019 provided initial incentives to reduce the surplus. From 2018 onwards, a significant upward trend in certificate prices has been observed. The average price reached EUR 15.50/t CO₂-eq in 2018 and climbed to EUR 24.72/t CO₂-eq in 2019. The peak level of EUR 29.46/t CO₂-eq in 2019 reflected the market’s reaction to the gradual reduction of supply through the MSR. In 2021 and 2022, the market experienced strong price dynamics. In 2021, the average price doubled compared to the previous year, reaching EUR 54.15/t CO₂-eq. In 2022, an average price of EUR 80.18/t CO₂-eq and a maximum value of EUR 97.51/t CO₂-eq marked a historical high. This development is linked to the adoption of the EU Climate Law in 2021, setting legally binding targets for 2030 and 2050, as well as the “Fit for 55” package of policies and instruments aimed at reaching the 55 % emissions reduction target in 2030, which also increased ambition of the EU ETS. In addition, the tightening of natural gas supply from Russia led to a surge in gas prices and a temporary shift from gas to coal in power generation, contributing to higher ETS emissions and thus higher allowance price (see Nissen et al. 2023, p. 8 ). In 2023, the average EUA price remained at a high level at EUR 83.60/t CO₂-eq. In 2024, a correction occurred, with the average price falling to EUR 64.76/t CO₂-eq. This development reflects dampened economic activity and the rising share of renewable energy in electricity generation. Despite the consolidation, the price level remains well above pre-2021 values and continues to provide a strong decarbonisation incentive. 0 20 40 60 80 100 120 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 CO Prices EU t CO e EUA price (secondary market) EUA 2008 futures (secondary market) EUA price (primary market) EUAA price (primary market) ETC-CM Report 2025/06 14 2 Sector-specific Analysis Key messages: Stationary installations: Emissions continued the downward trend of recent years with -6 % in 2024 compared to 2023, reaching 1,033 Mt CO₂-eq. This is a considerable reduction, but nevertheless slowdown compared to the sharp decline of 17% between 2022 and 2023. Combustion sector: Since 2005, combustion emissions from stationary installations declined by more than a half (-53%). Reductions continued with 9 % between 2023 and 2024 and were driven by coal and gas phase-down and higher renewable and nuclear generation. Lignite and hard coal power plants accounted for the largest reductions (-17 Mt and -32 Mt CO₂ respectively). Five countries (Germany, Poland, Czechia, Italy, Spain) contributed almost 75 % of total power plant emissions. Power sector emissions fell in nearly all major emitting Member States, with particularly strong reductions in Portugal (-42 %) and France (-33 %). Industrial sector: Industrial emissions remained largely stable (-0.5 %), reflecting limited structural transformation despite short-term output reductions. From 2021-2024, reductions were driven mainly by high gas prices that unlocked efficiency gains and led to reduced production, not by breakthrough decarbonisation. Cement and lime, iron and steel, and refineries accounted for nearly three-quarters of industrial EU ETS1 emissions in 2024. Free allocation continues to shield most industrial emissions, with 98.6 % of cement and lime emissions covered in 2024. From 2026, the Carbon Border Adjustment Mechanism (CBAM) will gradually replace free allocation, for imports of cement, iron and steel, aluminium, fertiliser, and hydrogen sector, phasing in fully by 2034. Aviation: Emissions rose by 15 % in 2024 to 64 Mt CO₂, reflecting continued post-pandemic recovery. The supply-demand gap was -45 Mt EUAAs in 2024. The sector is increasingly reliant on purchasing EUAs from the stationary and maritime sectors. Maritime transport: Maritime transport is included in the EU ETS1 for the first time in 2024, with verified emissions of 89.9 Mt CO₂. Shipping companies must surrender allowances for 40 % of their verified emissions in 2024, rising to 100 % by 2026. Emissions are concentrated in a few countries, with Greece, Italy and Spain each reporting more than 10 Mt CO₂. ETC-CM Report 2025/06 15 This chapter provides a sector-specific analysis of developments under the EU ETS1 for the period 2005 to 2024. It covers stationary installations (combustion and industrial activities) and transport under the EU ETS1 (aviation and maritime). The objective is to provide a more detailed understanding of trends observed across these sectors. 2.1 Stationary Installations In 2024, the verified emissions from stationary installations in the EU ETS1 amounted to a total of 1,033.3 Mt of CO₂-eq. This corresponds to a decrease of 6% compared to the previous year. Emissions from combustion (activity code 20) fell by 9 % to 588.9 Mt, while industrial emissions (activity codes 2199) only recorded a slight decrease of 1 % to 444.4 Mt (see Table 2-1Table 2-). The total quantity of emission allowances (EUAs) made available amounted to 985.8 million in 2024. Of this, 487.8 million EUAs (45%) were allocated for free to existing installations and 592.8 million EUAs (55%) were auctioned. Compared to 2023, this represents decreases of 2% and increase of 15% respectively. No allocation was reported for new installations or capacity expansions in this reporting year. The balance between the demand for and the supply of allowances amounted to -42.6 million EUAs, compared to -82.4 million EUAs in the previous year. In the same period, 271 million EUAs were withdrawn via the Market Stability Reserve (MSR) - a decrease of 16 % compared to 2023. The average EUA market price fell to €64.76/t CO₂ (2023: €83.60/t; see Table 2-). Table 2-1 EUA demand, supply and price (stationary installations), 2023-2024 2023 2024 Change 2023-2024 Verified emissions (Mt CO2-eq.) 1096.8 1123.2 +2% Combustion emissions 649.9 588.9 -9% Industrial emissions 446.8 444.4 -1% Maritime emissions* 89.9 Total supply of allowances (millions of EUA) 1,014.4 1080.6 +7% Free allocation (incumbents, new entrants) 496.8 487.8 -2% To existing installations 496.8 487.8 -2% To new entrants and capacity extensions - - Auctioned amounts 517.6 592.8 +15% Supply/demand balance (millions of EUA) -82.4 -42.6 MSR intake (millions of EUA) -323 -271 -16% Average EUA price (EUR) 83.60 64.76 -23% Note: Although maritime transport is not part of the stationary sectors, verified emissions from maritime activities are included in this table to reflect the full EUA demand under the EU ETS1. The inclusion is necessary to ensure consistency with the logic of the supply-demand balance, which considers total demand for general EUAs regardless of sector. Shipping companies use EUAs to cover their obligations as there are no sector-specific allowances for maritime transport. Source: EEA (2025b) The development since 2005 is shown in Figure 2-1. Emissions from fuel combustion activities, (activity code 20) fell from 1,254 Mt in 2005 to 589 Mt in 2024 (-53 %). The decline was particularly pronounced in the years from 2019 onwards. Emissions from industrial plants have remained more constant. Overall, they fell from 523 to 444 Mt of CO₂-eq (-15 %) since 2005. The decline in emissions from combustion is mainly driven by changes in the fuel mix and political measures for decarbonisation, particularly in the power sector. Although electricity consumption has ETC-CM Report 2025/06 16 recently increased, the emission intensity of power generation continues to decrease due to the growing share of renewables and the phase-out of fossil fuels. The relatively stable industrial emissions indicate a less advanced transformation process in this segment (see section 2.1.2). Figure 2-1 Verified Emissions: Stationary installations (2005–2024) Note: Values exclude the United Kingdom (for all years) and do not include scope estimates. Source: EEA (2025b) 2.1.1 Combustion Combustion installations (activity code 20) constitute the largest category of stationary installations within the EU ETS1 and are responsible for 50% emissions recorded under the system. The majority of combustion-related emissions (about 82%) originate from electricity generation. The share of electricity generated from various fuel types differs substantially among EU Member States, leading to notable differences in their emission profiles under the EU ETS1. Figure 2-2 illustrates net electricity generation by fuel type, broken down by country for the year 2024 and sorted by the share of conventional thermal generation in the electricity generation mix. Countries with a higher reliance on conventional thermal power generation typically report higher shares of emissions within the EU ETS1, while those utilizing nuclear, hydro, or renewable energy sources have significantly lower emissions from this sector. It is important to note that while some Member States may have a high relative share of fossil-based electricity generation, their absolute emissions can still be comparatively low. 1,254 1,259 1,347 1,292 1,189 1,217 1,202 1,179 1,153 1,083 1,093 1,069 1,076 1,015 883 760 818 826 650 589 523 532 566 568 462 489 486 461 534 536 538 538 545 542 532 493 519 487 447 444 0 200 400 600 800 1,000 1,200 1,400 1,600 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 1st Trading Period 2nd Trading Period 3rd Trading Period 4th Trading Period eri ed Emissions (Mt CO2 eq.) Combus on of fuels (ETS ac vity code 20) All industrial installa ons (21 99) ETC-CM Report 2025/06 17 Figure 2-2 Net electricity generation by fuel type and country in 2024 (%) Source: Eurostat (2025) In 2024, combustion installations emitted a total of 589 Mt CO₂, compared to 650 Mt in 2023. Figure 2presents the emissions trend of EU ETS1 combustion installations between 2021 and 2024, disaggregated by fuel type. 5 Emissions from power plants declined by 55 Mt CO₂ in 2024 compared to the previous year. The largest reductions occurred at lignite-fired power plants (-17 Mt CO₂) and hard coal-fired power plants (-32 Mt CO₂). Gas-fired power plants reported 6 Mt CO₂ less than in 2023. Emissions from other combustion installations, including district heating plants and industrial heat production outside of identified industrial activities, decreased by approximately 13 Mt CO₂ compared to the previous year. 5 Since power plants are not explicitly identified in the Union Registry, their classification and fuel assignment were carried out manually based on the methodology described in Hermann et al. (2021). 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% MT C P EE T E GR C DE R EU27 G U RO T DK E ES S PT SK F AT U SE FR O S et electricity genera on by type of fuel Conven onal Thermal uclear ydro ind Solar Other ETC-CM Report 2025/06 18 Figure 2-3 Emissions of combustion installations Source: DG CLIMA (2025c; 2025d) based on methodology developed in Hermann et al. (2021) Figure 2-3 examines the changes in emissions from power plants in the countries with the highest powerrelated emissions (Germany, Poland, Italy, Czechia, Spain). In 2024, these five countries accounted for nearly 75 % of CO₂ emissions from all power plants covered by the EU ETS1. Emission reductions were observed across all of them. In Germany and Poland, emissions from coal-fired power plants (hard coal and lignite) decreased by a combined total of approximately 23 Mt CO₂ and 5.5 Mt CO₂ respectively. Together, these reductions represent nearly half of the total decrease in emissions from coal-fired power generation. A more detailed analysis of emission trends from power plants in other countries is provided in Figure 2-4. 453 381 158 143 111 417 361 215 189 172 60 54 45 42 42 186 131 152 121 115 53 38 23 20 17 7 5 3 21 44 41 33 28 26 130 106 105 0 200 400 600 800 1,000 1,200 1,400 2005 2013 2020 2023 2024 eri ed Emissions (Mt CO2) ard Coal ignite last Furnace atural Gas Oil products Other Unknown on power combus on ETC-CM Report 2025/06 19 Figure 2-4 Emissions from power plants by fuel in selected Member States (2023–2024) Source: DG CLIMA (2025c; 2025d) based on methodology developed in Hermann et al. (2021) Figure 2-5 illustrates the long-term development of EU ETS1 emissions from power plants by fuel type and country from 2005 to 2024. Emission trends continue to show significant differences between Member States. Several countries, including Luxembourg and Portugal, have reduced their power sector emissions by more than 90 % since 2005. Finland and Austria by more than 80%. Denmark, Spain, France, Sweden, Greece and Romania have also achieved substantial reductions of over 70 %. y contrast, emission reductions in some other countries remain comparatively modest, with Cyprus reporting a 7 % decrease and Lithuania a 23 % decrease in emissions from power generation over the same period. 0 20 40 60 80 100 120 140 160 180 200 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 2023 2024 DE P T C Other eri ed Emissions (Mt CO2) ard Coal ignite atural Gas last Furnace ETC-CM Report 2025/06 20 Figure 2-5 Emissions of power plants by fuels and by country in Mt CO2 (2023–2024) Note: No fossil power plants in Iceland and Liechtenstein. Bulgaria and Romania joined in 2007, Croatia in 2013. Great Britain left in 2020 but Northern Ireland remained in the EU-ETS1. Since 2020, Sweden reports the emissions from the blast furnace power plant under activity code 24 Source: DG CLIMA (2025c; 2025d) based on methodology developed in Hermann et al. (2021) 0 5 10 15 20 Austria 0 10 20 30 elgium 0 10 20 30 40 ulgaria 0 1 2 3 4 Croa a 0 2 4 6 Cyprus 0 20 40 60 80 Czechia 0 10 20 30 Denmark 0 5 10 15 Estonia 0 10 20 30 Finland 0 10 20 30 40 France 0 100 200 300 400 Germany 0 20 40 60 Greece 0 5 10 15 20 ungary 0 5 10 15 20 reland 0 50 100 150 taly 0 1 1 2 atvia 0 2 4 6 8 ithuania 0 1 1 2 u embourg 0 1 1 2 2 3 Malta 0 20 40 60 etherlands 0 50 100 150 200 Poland 0 5 10 15 20 25 Portugal 0 10 20 30 40 50 Romania 0 2 4 6 8 Slovakia 0 2 4 6 8 Slovenia 0 50 100 150 200 Great ritain 0 2 4 6 8 orthern reland 0 50 100 150 Spain 0 2 4 6 Sweden 0.0 0.2 0.4 0.6 0.8 1.0 celand 0.0 0.2 0.4 0.6 0.8 1.0 iechtenstein 0 1 1 2 orway ETC-CM Report 2025/06 21 Table 2-2 provides context for the decline in emissions from fossil-based power generation in 2024. Compared to the previous year, generation from fossil fuel sources decreased by 76 TWh, with significant reductions in coal and gas-fired generation (-37 and -35 TWh, respectively). Several key factors contributed to this development: • Increased generation from low-carbon sources: Nuclear output rose by nearly 30 TWh in total, mainly driven by improved availability in France. However, nuclear generation declined in almost all other countries, with the notable exception of Sweden. Wind and solar generation increased by 45 TWh combined, and hydro output rebounded by 43 TWh after a dry period in previous years. • Higher electricity demand: Electricity consumption increased by 32 TWh in 2024. Nevertheless, the strong expansion of low-emission generation more than met this additional demand, allowing fossil-based generation to decline further. • Country-specific developments: Portugal achieved the largest relative emissions reduction in the power sector (-42 %), due to a sharp decline in fossil generation and a strong increase in hydro output. France also recorded a notable drop (-19 %), driven by lower gas use and a substantial recovery in nuclear generation. Croatia (-23 %) and Finland (-19 %) also showed marked reductions in fossil generation. Table 2-2 Change in emissions from electricity generation, electricity consumption and generated amounts by fuel (2023-2024) Note: * Combustion installations (Activity Code 20) ** Additional thermal electricity generation is reported by Eurostat from oil, renewable and non-renewables, which are not shown here. *** No data for Liechtenstein (LI) and Northern Ireland (XI) available Source: EEA (2025b), Eurostat (2025) ETC-CM Report 2025/06 22 Table 2-3 lists the 30 power plants with the highest verified CO2 emissions under the EU ETS1 for the year 2024. The data are based on verified emissions reported in the Union Registry (previously EUTL) and matched with actual generation data from ENTSO-E. Fuel types were assigned according to the methodology by Hermann et al. (2021). The ranking continues to be dominated by lignite fired power plants. ełchatów in Poland remains the largest single emitter with 27.2 Mt of CO2, showing a 4 % increase compared to the previous year. Neurath, Jänschwalde, and Niederaußem in Germany follow in the top four, despite recording significant reductions in emissions. Together, these installations account for more than 16 % of total emissions from power generation in the EU ETS1. While some facilities such as Boxberg IV and Weisweiler reported notable increases in emissions, others like Schwarze Pumpe and Opole showed marked declines. The composition of the top 30 also reflects the ongoing presence of hard coal and blast furnace gas as relevant fuels in several Member States. Emission intensities range from approximately 0.85 to 1.3 t CO2 per megawatt hour for lignite and hard coal plants, consistent with historical values. For blast furnace gas plants, no emission intensity is reported due to data limitations. Changes in ranking compared to the previous year reflect shifts in dispatch patterns, operational hours or the return of reserve capacity. Among the top 30 installations in 2024, 19 primarily used lignite, seven were hard coal based and four reported blast furnace gas as the main fuel. These 30 power plants emitted a total of 191 Mt of CO2, with the largest shares originating from Germany (45 %) and Poland (34 %). Together, these two countries accounted for nearly 80 % of emissions from the top 30. Other notable contributions came from Czechia (7 %) and Bulgaria (4 %), while the remaining countries each accounted for 2 % or less. This concentration reflects the regional distribution of high emitting coal and lignite capacity within the EU ETS1. ETC-CM Report 2025/06 23 Table 2-3 Top 30 emitters in 2024 (power plants) Rank 2023-2024 EUTL ID Company Power Plant Main Fuel Verified Emissions 2024 (Mt CO2) Change 20232024 Emission intensity 2024* (t CO2/ MWh) 1 = PL 1 PGE ełchatów Lignite 27,2 4% 1,14 2 = DE 1606 RWE Neurath Lignite 13,4 -19% 1,05 3 = DE 1456 LEAG Jänschwalde Lignite 12,1 -13% 1,26 4 = DE 1649 RWE Niederaußem Lignite 11,8 -11% 1,13 5 ↑(6) DE 1607 RWE Weisweiler Lignite 10,3 12% 1,25 6 ↑(7) PL 4 ENEA Kozienice Hard coal 9,1 2% 0,92 7 ↑(9) PL 3 PGE Turów Lignite 8,2 -7% 1,28 8 ↓(5) DE 1459 LEAG Schwarze Pumpe Lignite 8,1 -16% 1,14 9 ↑(11) DE 1454 LEAG Boxberg Werk IV Lignite 8,0 18% 1,02 10 ↓(8) PL 2 PGE Opole Hard coal 7,3 -19% 0,87 11 ↑(12) DE 1453 LEAG Boxberg Werk III Lignite 5,8 -7% 1,18 12 ↓(10) DE 1460 LEAG Lippendorf Lignite 5,7 -23% 0,96 13 ↑(14) BG 50 TPP Maritsa East 2 Lignite 5,1 19% 1,14 14 ↓(13) PL 5 Enea Połaniec Hard coal 4,8 -6% 0,74 15 ↑(19) BE 750 Electrabel Knippegroen blast furnace gas 4,6 20% - 16 ↑(17) DE 1376 Uniper Kraftwerk Schkopau Lignite 4,3 9% 1,29 17 ↑(20) NL 188 Nuon Power Generation B.V. Nuon Power Velsen blast furnace gas 4,1 12% - 18 ↓(16) ES 201 EDP Aboño 1 Hard coal 4,0 -1% 1,50 19 ↑(21) CZ 129 CEZ Elektrarna Tusimice 2 Lignite 3,7 5% 0,93 20 ↓(15) CZ 124 Sev.en Energie Elektrarna Pocerady Lignite 3,7 -11% 1,05 21 ↑(26) DE 1132 Salzgitter Flachstahl Kraftwerk Hallendorf blast furnace gas 3,5 11% - 22 ↑(28) CZ 127 CEZ Elektrarna Prunerov 2 Lignite 3,5 14% 0,96 23 ↑(27) PL 31 TAMEH Polska Zaklad Wytwarzania Nowa blast furnace gas 3,4 10% - 24 ↓(23) DE 1380 Großkraftwerk Mannheim Mannheim Hard coal 3,1 -8% 1,04 25 ↑(37) SI 4 TERMOELEKTRARNA Termoelektrarna Sostanj Lignite 3,1 13% 1,01 26 ↓(18) PL 209933 ENEA Kozienice Block 11 hard coal 3,1 -20% 0,85 27 ↑(29) HU 142 RWE Mátrai Eromu ZRt. Lignite 2,9 -3% 1,22 28 ↑(30) PL 27 PGNiG TERMIKA ELEKTROCIEPLOWNIA SIEKIERKI Hard coal 2,8 -4% 1,73 29 ↑(41) BG 152 AES-3C Maritza East 1 TPP AES-3C Maritza East 1 Lignite 2,7 6% 1,20 30 ↑(33) CZ 121 CEZ Elektrarna Ledvice Lignite 2,7 -3% 1,05 Note: All installations are power plants reporting under the activity code combustion in the EUTL. Values in brackets show the ranking from the previous year *Emisson intensity of blast furnace installations not calculated due to unclear electricity generation data (LI) and Northern Ireland (XI) available Source: DG CLIMA (2025c; 2025d) based on methodology developed in Hermann et al. (2021), ENTSO-E (2025) 2.1.2 Industry Figure 2-6 examines emissions trends from industrial installations (activity code 21-99) in the EU ETS1 since 2013, the start of the third trading period in the EU ETS1. Industrial emissions covered by the EU ETS1 fell by 16.8 % between 2013 and 2024, while combustion emissions decreased by 55.6 % over the same time period, leading to an overall reduction of stationary emissions of 45.8 %. ETC-CM Report 2025/06 30 It is important to distinguish transport emissions covered by the EU ETS1 from those under the EU ETS2, which will start in 2027 and cover CO₂ emissions from the combustion of fuels in road transport, buildings and additional sectors not included in EU ETS1. In EU ETS2, the compliance obligation lies with fuel suppliers rather than with the transport operators (see chapter 4). 2.2.1 Aviation In 2024, emissions from aviation under the EU ETS1 continued to rise. Total reported emissions increased by 15% compared to 2023 and reached 64.1 million tonnes of CO₂. This development reflects the ongoing post pandemic recovery in air transport activity that has been observed in recent years. Within the EU ETS1 scope, aviation operators reported 61.5 million tonnes of CO₂ in 2024. A further 1.1 million tonnes of CO₂ were reported in the Swiss ETS for flights under the EU ETS1 scope, while 0.7 million tonnes of CO₂ were reported in the EU ETS1 for flights under the Swiss ETS scope At the same time, the total supply of EU Aviation Allowances (EUAAs) decreased. Free allocation to aviation operators fell by 22% to 19.0 million EUAAs. Allocations from the New Entrants Reserve were zero. Auctioned volumes increased to 6.7 million EUAAs, which is an increase of 17%. The annual supply and demand balance widened from -31.3 million EUAAs in 2023 to -45.1 million EUAAs in 2024. This underlines the growing reliance of the aviation sector on allowances from the stationary sector. The average EUAA Price declined by 21% to EUR 64.8. This decline reflects the broader carbon market development, as EUAA prices closely follow those of EU Allowances (EUA) under the ETS1 system. Table 2-4 EUAA demand, supply and price for aviation operators (2023-2024) 2023 2024 Change 2023-2024 Total demand (Mt CO2) 55.8 64.1 15% Aviation emissions EU-ETS1 53.5 61.5 15% Reported in Swiss-ETS for EU-ETS1 scope 0.9 1.1 23% Reported in EU-ETS1 for Swiss-ETS scope 0.7 0.7 1% Reported in Swiss-ETS for Swiss-ETS scope 0.8 0.9 21% Total supply (millions of EUAAs) 24.5 19.0 -22% Aviation free allocation 17.2 10.9 -37% Aviation free allocation (NER) - - - Auctioned amounts 5.7 6.7 17% Allocation in Swiss-ETS for EU-ETS1 scope 0.4 0.3 -26% Allocation in EU-ETS1 for Swiss-ETS scope 0.5 0.3 -28% Allocation in Swiss-ETS for Swiss-ETS scope 0.5 0.4 -24% Swiss auctioned amounts 0.2 0.4 136% Annual supply-demand balance (millions of EUAAs) -31.3 -45.1 44% Average EUAA price* (EUR) 82.3 64.8 -21% Notes: NER, New Entrants Reserve. Sources: EC (2025b), EEA (2025b), EEX (2025), FOEN (2025), FOEN (2025) The time series of verified emissions for aviation operators from 2013 to 2024 shows a steady increase from the start of the EU ETS1 until 2019, with only minor year-on-year variations (see Figure 2-11). In 2020 and 2021, verified emissions declined sharply due to the significant reduction in air traffic following the COVID-19 pandemic. From 2022 onwards, emissions increased again and in 2024 they were close to the highest levels observed before 2020. ETC-CM Report 2025/06 31 The annual cap for aviation, which is the total quantity of emission allowances available, was set based on the average verified emissions of the years 2004 to 2006, adjusted by a factor of 0.95. It remained constant at 38 million tonnes of CO₂ equivalent between 2013 and 2020. n 2021, the cap was adjusted to account for Brexit, including the reduced scope as flights from the UK were no longer covered by the EU ETS1. Since 2021 the linear reduction factor is also applied to the cap for aviation. Thus, the cap was reduced to 27 million tonnes of CO₂. n 2024, the cap increased slightly due to the inclusion of flights to and from the outermost regions 8 . In almost all years since 2013, except for 2020 and 2021, verified emissions were above the cap. This required the aviation sector to acquire additional allowances from the wider EU ETS1 market, where emission reductions are often achieved at lower cost in other sectors. In early 2024 the European Commission adopted rules for a support mechanism designed to accelerate the use of sustainable aviation fuels (SAF) in commercial aviation (DG CLIMA 2025b). The mechanism aims to partially or fully offset the price difference between fossil kerosene and SAF, with funding provided through the EU ETS1. For this purpose, 20 million EU ETS1 allowances, with an estimated value of around EUR 1.6 billion, have been reserved as of 1 January 2024. Airlines were required to report their 2024 fuel use by 31 March 2025. The Commission subsequently published the official price differences between fossil kerosene and SAF in May 2025. Based on these data, the Commission decided in August 2025 on the allocation of allowances under the mechanism. In September 2025, it announced that approximately 1.3 million allowances (worth about EUR 100 million) had been distributed to 53 airlines. 9 Since 2013, the scope of the EU ETS1 for aviation has been limited to flights within the EEA and flights between the EEA and Switzerland. This limitation was introduced after the EU decided in 2012 to suspend the inclusion of all international flights in the system, following opposition from third countries and the launch of negotiations in the ICAO to establish a global market-based measure. These negotiations resulted in the adoption of the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA), which started with a pilot phase in 2021 and applies to international flights between participating states outside the EU ETS1 scope. Under CORSIA, operators must offset the growth in their CO₂ emissions above a defined baseline for international flights between participating states that are not covered by the EU ETS1, by purchasing and cancelling eligible emission units from approved carbon crediting programmes. Airlines can also reduce their offset obligations by using SAF. 8 The “outermost regions” refer to territories that are part of EU Member States but geographically distant from mainland Europe, such as the Azores, Madeira, the Canary Islands, and several French overseas departments. Until 2023, flights to and from these regions were exempted from the EU ETS; they have been included since 2024, leading to a slight increase in the aviation cap. 9 https://climate.ec.europa.eu/news-other-reads/news/eu-allocates-eu100m-worth-ets-allowances-help-airlines-buysustainable-aviation-fuels-2025-09-17_en ETC-CM Report 2025/06 32 Figure 2-11 Verified Emissions: Aviation operators (2005–2024) Source: EU (2020), EEA (2025b) 47 49 51 55 57 63 67 25 28 49 53 61 0 10 20 30 40 50 60 70 80 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 3rd Trading Period 4th Trading Period eri ed Emissions (Mt CO2) Avia on eri ed Emissions Avia on Cap ETC-CM Report 2025/06 33 Table 2-5 presents the top 10 emitters in the aviation sector in 2024 based on a consolidated operator approach, grouping individual airlines under their parent companies. Several entries therefore represent corporate groups rather than single carriers — for example, Austrian Airlines, Brussels Airlines, Eurowings and Swiss are included under Lufthansa Group, while British Airways, Iberia and Vueling are aggregated under International Airlines Group. This approach avoids fragmentation of emissions among subsidiaries and provides a clearer representation of the largest emitting corporate entities in the aviation sector. In 2024, verified emissions from aviation under the EU ETS1 totalled 61.4 Mt CO₂, an increase of 15 % compared with 2023. Free allocation amounted to 17.2 million EUAAs, covering 28 % of total emissions. Ryanair remained the largest emitter with 12.1 Mt CO₂ ( 17 %), followed by ufthansa Group (7.8 Mt, 11 %) and Air France-KLM (5.6 Mt, +9 %). The International Airlines Group ranked fourth (5.2 Mt, +5 %), ahead of EasyJet (4.0 Mt, +15 %) and Wizz Air Group (3.1 Mt, +11 %). Norwegian recorded the largest relative increase among the top 10 (+21 %), while TAP Air Portugal and Aegean Airlines each reported emissions of 1.1 Mt. The “Other” category, comprising all remaining operators, accounted for 17.5 Mt CO₂ ( 24 %). ETC-CM Report 2025/06 34 Table 2-5 Top 10 emitters in aviation in 2024 Verified Emissions EU-ETS1 in 2024 (Mt CO2) Compared to 2023 Allocated (millions of EUAAs) Share of free allocations in 2024 Ryanair 12.1 +17% 3.3 27% Lufthansa Group 7.8 +11% 2.2 28% Air France-KLM 5.6 +9% 1.6 28% International Airlines Group 5.2 +5% 1.5 29% Easyjet 4.0 +15% 1.1 28% Wizz Air Group 3.1 +11% 0.9 28% SAS 1.8 +5% 0.5 28% Norwegian 2.0 +21% 0.6 27% TAP Air Portugal 1.1 +1% 0.3 30% Aegean Airlines 1.1 +11% 0.3 27% Other 17.5 +24% 4.9 28% Total Aviation 61.4 +15% 17.2 28% Note: Lufthansa Group: Deutsche Lufthansa, Austrian Airlines, Brussels Airlines, Lufthansa Cargo, Air Dolomiti, Eurowings, EW Discover, Edelweis Air, Luftahnsa Technik, Swiss Air Air France-KLM: Air France, KLM, Transavia Airlines International Airlines Group: Vueling Airlines, British Airways, Iberia, Aer Lingus Edelweiss Air and Swiss Air report their emissions in the Swiss ETS. Their emissions are therefore not included here Source: DG CLIMA (2025c; 2025d) 2.2.2 Maritime The EU ETS1 was extended to include maritime transport starting in 2024 as part of the broader "Fit for 55" package. The extension covers CO2 emissions from ships of 5,000 gross tonnage (GT) and above on voyages within the EEA, at berth and on 50% of international ingoing and outgoing voyages. 2024 is the first reporting year of verified CO2 emissions for shipping companies covered by the extension of the EU ETS1 to maritime transport. Initially, only a share of the verified emissions will be subject to the surrender obligation: in 2024, shipping companies need to surrender allowances for 40% of their verified emissions. This share increases to 100% by 2026. In contrast to aviation, allowances for maritime transport are fully auctioned from the first year onwards. The inclusion of maritime transport into the EU ETS1 cap increased the total number of allowances by 78.4 million in 2024 with a retrospective application of the LRF. Since 2018, shipping companies were already required to report CO2 emissions data on EU-related maritime transport through the EU shipping MRV system. More details on the EU ETS1 extension to maritime transport can be found in the previous Trends and Projections report (see Nissen et al. 2024) and in the factsheet by Wissner and Cames (2023). ETC-CM Report 2025/06 35 Table 2-6 shows the demand and supply for the maritime transport within the EU ETS1. There are no maritime-sector specific allowances and shipping companies covered their demand in the first reporting period with EUAs. On 16 September 2025, the Union Registry showed verified emissions of 89.9 million tonnes of CO₂. owever, the data in the registry is still subject to change. In the weeks prior, significant fluctuations in verified emissions were observed. For the purpose of this report, a data snapshot as of 16 September 2025 was used. ETC-CM Report 2025/06 36 Table 2-6 Demand & supply for maritime operators (2023-2024) 2023 2024 Change 2023-2024 Total demand (Mt CO2) - 89.9 - Notes: No free allocation for maritime operators. Maritime ETS started in 2024. Sources: EEAEuropean Environment Agency (2025b) Verified emissions for 2024 are broadly in line with the trends observed in previous years under the EU MRV system, as shown in the figure below. Emissions within the scope of the EU ETS1 ranged between 80 and 90 million tonnes of CO₂ in recent years and did not fluctuate significantly. Changes over time are mainly attributable to the COVID-19 pandemic, the UK’s withdrawal from the EU and Russia’s invasion of Ukraine. The impact of the COVID-19 pandemic was less pronounced than in the aviation sector (cf. Section 2.2.1). Figure 2-12 Verified Emissions: Shipping companies (2018–2024) Notes: Own estimates of ETS1 scope emissions for years before 2024 based on MRV data and using 50% of emissions reported for international voyages. Sources: EMSA (2024) Figure 2-13 shows that maritime emissions covered by the EU ETS1 are not distributed evenly among Member States. With over 10 MtCO2 emissions Greece, Italy and Spain have the largest share of total emissions. 101 105 89 84 91 82 85 0 20 40 60 80 100 120 2018 2019 2020 2021 2022 2023 2024 eri ed emissions in MtCO2 ETC-CM Report 2025/06 37 Figure 2-13 Maritime emissions by member state (2024) Sources: EEAEuropean Environment Agency (2025b) 0 2 4 6 8 10 12 14 16 18 GR ES T DE C FR DK O E F SE E P PT U EE T MT G R S S eri ed emissions (Mio. to CO2) ETC-CM Report 2025/06 38 3 Projections and Policy Impacts This section discusses expected developments of emissions from stationary installations, aviation and maritime transport, covered by EU ETS1. For this purpose, the latest projections submitted under Article 18 of the Governance Regulation 10 are considered for EU countries 11 . Iceland and Norway submitted WEM and WAM projections in 2025, too. 3.1 Stationary 3.1.1 Overview According to the latest emission projections under the ‘with e isting measures’ ( EM) scenario, stationary emissions in the EU ETS1 are projected to decrease by 61.7 % until 2030 compared to 2005 levels. If additional measures are taken into account in a ‘with additional measures’ (WAM) scenario, emissions in stationary EU ETS1 sectors are projected to decrease by 65.3 % compared to 2005 (see 10 Governance Regulation (EU) 2018/1999 https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32018R1999 11 All EU countries submitted GHG projections in 2025 but Bulgaria and Romania. For Romania, data was gap-filled based on their latest NECP submission. For Belgium, the 2024 submission was used and extrapolated to 2055. Key messages: • Projected Reductions in Stationary Emissions: Projected emission reductions are considerably higher compared to last year’s projections: By 2030, stationary emissions in the EU ETS1 are expected to decrease by 61.7 % compared to 2005 in a scenario with existing measures, or by 65.3 % if additional measures are implemented. According to these estimates, the total EU ETS1 target of a 62 % reduction by 2030 compared to 2005 could be achieved. This target includes the whole EU ETS1 scope, covering aviation and maritime emissions, as well as stationary installations. • Meeting the 2050 Climate Goals: Even in the scenario with additional measures, stationary EU ETS1 emissions are projected to be at about 390 Mt CO2-eq in 2050, which corresponds to a reduction of 81.1% compared to 2005 levels by 2050. This will not be sufficient to meet the EU climate neutrality target for 2050, as emissions from some of the sectors outside of the EU ETS1 are expected to be harder to abate than stationary EU ETS1 emissions. • Country-Specific Projections: Emission projections vary widely across EU Member States. Some countries, such as Sweden, Cyprus and Poland anticipate significant reductions of EU ETS1 emissions until 2030. The effect of increased electricity demand without the parallel increase of electricity production from renewable energy in scenarios with additional measures leads to lower projected emission reductions, which is the case in projections for Czechia, Germany, and Latvia. • Sector-Specific Trends: The energy industry is projected to continue driving emission reductions in the EU ETS1 until 2030, although the pace of reduction will slow after that point. Industrial processes and manufacturing are expected to see more modest declines in emissions, with little change projected after 2040. • Future of the EU ETS1 Cap: If the current linear reduction factor remains unchanged after 2030, the cap on EU ETS1 emissions reaches zero before 2040. But this scenario is neither aligned with projections from Member States, nor with projections made by the Commission in the context of the 2040 mpact Assessment. The Commission’s upcoming EU ETS1 Review is expected to reflect on these challenges. ETC-CM Report 2025/06 39 Figure 3-1). This projected decrease is considerably higher than in previous projections. The targeted reduction of 62 % compared to 2005 levels for the overall EU ETS1 is within reach, even considering the contrasting trend of EU ETS1 transport emissions: Aviation emissions are projected to grow rather than contribute to the reduction (cf. Section 3.2) and maritime emissions are projected to stay relatively constant (cf. Section 3.3). The annual average emission reduction in the next six years needs to be equal to 43 Mt CO2-eq to reach the EU ETS1 reduction target in 2030. According to the average decrease of aggregated projections of 52 Mt CO2-eq, (with existing) or 64 Mt CO2-eq (with planned measures), EU ETS1 stationary emissions are projected to be on track to reach that target. Figure 3-1 Historic and projected EU ETS1 emissions in stationary installations Sources: EEA (2025b), projections of EU Member States compiled by the European Topic Centre for Climate Change Mitigation (ETC/CM) as of September 2025. The cap shown in this figure has been derived from the aggrgated ETS1 cap, which is a cap including both stationary and maritime emissions. Note: EM means ‘with e isting measures’; AM means ‘with additional measures’ Historic stationary EU ETS emissions include scope estimates, excluding UK. The difference between the WEM and WAM scenarios increases only slightly between 2030 and 2050. If additional measures are considered, the total emission reduction for EU ETS1 stationary installations adds up to 80.8 % until 2050 compared to 2005. This is eight percentage points lower compared to the previous projections but still far off the EU climate neutrality target for 2050. The EU ETS1 cap was mainly designed to reflect the targeted emission reduction until 2030. If the current Linear Reduction Factor (LRF) is continued after 2030, the cap follows a linear path until it reaches zero before 2040. However, even in scenarios in which the EU’s 2050 climate neutrality target is achieved, EU ETS1 emissions are projected to persist in the year 2040, e.g. in the 2040 Impact Assessment scenarios 0 500 1,000 1,500 2,000 2,500 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 EU ETS1 Emissions (Mt CO2-eq) Stationary EU ETS1 emissions historic Projected EU ETS1 emissions (WEM) Projected EU ETS1 emissions (WAM) CAP stationary 2005-2024:-51% 2005-2030 (WAM): -65% ETC-CM Report 2025/06 46 3.3 Maritime Transport 3.3.1 Overview Maritime transport emissions have been included under the EU ETS1 since 2024 and this year’s report is the first to include projections of this sector within the annual report series. The calculated cap on maritime emissions gives an indication of the targeted reduction of emissions in this sector: following this calculated cap, emissions should decrease by 50.8 % compared to 2005 emissions until 2030. Similarly to aviation, maritime transport emissions are expected to increase until 2050 based on the WEM and WAM projections of EU Member States (see Figure 3-7 below). This is in contrast to projections published in the Commission’s Impact Assessment related to the EU ETS1 extension to maritime transport. The Impact Assessment projects emissions to decline by 92 % by 2050 compared to the reference scenario (absolute maritime transport emissions of 161 Mt CO2 in 2050) (EC 2024). 3.3.2 Emission trend Since 2007, emissions from international EU-related maritime transport have generally decreased. There was a steep increase of emissions between 1990 and 2007 with a drop afterwards due to the global economic crisis (IMO 2020; EC 2025a). The drop in emissions in 2020 due to the COVID-19 pandemic was not as steep as for aviation, given that mainly maritime passenger transport was impacted. In 2024, 66 % of the EU-wide maritime emissions were covered by the EU ETS1. ETC-CM Report 2025/06 47 Figure 3-7 EU ETS1 shipping emissions between 2005 and 2050 Note: Historic and projected emissions are calculated with the estimate of a constant share of EU ETS1 emissions on international navigation emissions as reported in GHG inventory and national projections. The EU ETS1 stationary cap was adjusted in 2024 to account for inclusion of the maritime sector. The target shown in this figure has been calculated from the aggrgated EU ETS1 cap in 2024, which is a cap together for stationary and maritime emissions. Sources: EEA (2025b), projections of EU Member States compiled by the European Topic Centre for Climate Change Mitigation (ETC/CM) as of September 2025 Emission projections under both existing and additional measures suggest that EU ETS1 maritime emissions in 2025 will be around 5 Mt CO2-eq higher than the 2024 inventory value. Member States do not report maritime EU ETS1 projections directly, instead they provide projections for total domestic and international navigation. Maritime EU ETS1 projections were therefore derived by applying the 2024 share of EU ETS1 maritime emissions to the reported international navigation projections. The accuracy of these projections is expected to improve as more historical data becomes available. The calculated target shown in Figure 3-7 for the maritime sector under the EU ETS1 is around 15 Mt CO2eq lower than 2024 emissions. This target was derived from the combined EU ETS1 cap, which covers both emissions from stationary installations and the maritime sector. 14 If maritime emissions exceed this estimated target, additional emission reductions in other EU ETS1 sectors will be required to ensure total emissions remain within the combined cap. From 2026 onwards, methane and nitrous oxide emissions from maritime transport will also be covered by the EU ETS1. Offshore ships will be covered as an additional ship type from 2027 onwards. A decision regarding the inclusion of smaller ships below 5,000 GT from 2027 onwards is expected in 2026 based on 14 The calculated target was derived from the cap increase of the EU ETS1 when in 2024 its scope was extended to include the maritime sector. 0 20 40 60 80 100 120 140 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Mt CO2-eq ETS maritime (historic) ETS maritime (WEM) ETS maritime (WAM) Calculated target ETC-CM Report 2025/06 48 a review of the maritime ETS. These planned and pending extensions will increase the share of emissions covered by the EU ETS1 before 2030. Several exemptions where shipping companies do not have to surrender allowances for their emissions will end after 2030, such as voyages to/from outermost regions and to/from small islands. The exemptions likely represent a small share of EU-related shipping emissions but will increase the share of covered emissions and demand for allowances after 2030. Both these changes to the scope and covered emissions before and after 2030 were not considered in the projections shown in Figure 3-7 above. At global level, negotiations at the International Maritime Organization (IMO) progressed in early 2025 with a draft agreement on an IMO Net-Zero Framework (NZF) containing a new fuel standard with an economic element (IMO 2025). However, the extraordinary meeting at IMO in October 2025 did not result in an adoption of the NZF and the decision was postponed by one year. The European Commission is tasked with submitting a report to examining this potential new IMO measure within 18 months of the adoption of such a measure regarding its ambition and coherence with the EU ETS1. If appropriate, the Commission may propose amendments to the Emissions Trading Directive in that regard. ETC-CM Report 2025/06 49 4 Focus Topic: EU ETS2 Overview The EU ETS2 covers CO2 emissions from combustion of fossil fuels in the road transport and the buildings sector, as well as CO2 emissions from the combustion of these fuels in smaller industrial installations that are currently not covered under the EU ETS1. The system was introduced as part of the Fit for 55 package to accelerate emission reductions in those sectors where emissions have not declined in line with the ambitious climate targets of the EU. The EU ETS2 scope applies to 40 % of the EU’s 2024 G G emissions. It is set out to become a core element of European climate policy, with an aim to reduce the covered emissions by 42 % in 2030 compared to 2005 levels (EC n.d.). The EU ETS2 entered into a transitional period in 2024 with regulated entities already having to monitor and report their emissions. The system was to become fully operational in 2027 but will now likely be postponed do 2028 15 . From then onwards, regulated entities will have to surrender emission allowances corresponding to their annual emissions. The EU ETS2 functions in the same way as the EU ETS1, operating as a cap-and-trade system. Regulated entities are subject to an annually declining emissions cap and need to surrender sufficient allowances to cover their emissions in each year. The ETS2 allowances are tradable 15 Member States have proposed to delay the start of the EU ETS2 by one year. The proposal for the new start of the system is supported by the European Parliament but not yet enshrined in law. Key messages: • Start of the EU ETS2 originally planned for 2027 but likely moved to 2028, start of the Social Climate Fund in 2026: The EU ETS2 will cover CO2 emissions from the combustion of fuels in road transport and buildings, as well as industry not currently covered by EU ETS1. A recent Council decision and European Parliamentary vote make it likely that the start will be postponed to 2028. In 2026, the Social Climate Fund will start to operate, with the goal of supporting vulnerable groups in reducing their fossil fuel consumption through targeted investments and programmes. • Importance of road transport in the EU ETS2: Road transport contributes the majority of emissions in EU ETS2 sectors across the system. It will be crucial to reduce these emissions to align with the ambitious climate goals of the EU and ensure that the EU ETS2 allowance price remains at sustainable levels. • Importance of buildings sector depends on fuel mix used for heating energy: Countries where the heating system is based on district heating (mostly covered by EU ETS1) and electricity or renewables, have low EU ETS2 emissions in the buildings sector. Countries where the heating system is based on individual fossil-fueled boilers have high EU ETS2 emission shares in the buildings sector. • Modest historical progress in EU ETS2 sectors: Emissions within EU ETS2 sectors have been declining at a slower rate than those in EU ETS1 sectors. Within the EEA, emissions in EU ETS2 sectors declined by 6.7 % between 2015 and 2023, whereas EU ETS1 emissions declined by 32.7 % over the same period. • Steady decrease of projected EU ETS2 emissions until 2050 with a large impact of additional measures: Projected EU ETS2 emissions decrease steadily until 2050. Projections between the WEM and WAM scenarios diverge strongly, indicating an important contribution of planned policies and measures on the emissions reductions in EU ETS2 sectors. ETC-CM Report 2025/06 50 and can be purchased at auctions, on the market or via direct trades with other market participants. There will be no free allocation in the EU ETS2, all allowances will be distributed via auctions. Contrary to the EU ETS1 the system operates as an upstream system. Fuel suppliers will be charged with the EU ETS2 costs, that they will then pass on to the consumers of the covered fuels. Thus, EU ETS2 prices will impact consumer prices and make the purchase of the covered fossil fuels more costly compared to climate-friendly alternatives. This is the price signal that should induce the reduction of fossil fuel use and thus CO2 emissions in the covered sectors. Recognising that higher prices for fossil fuels that are used to heat homes, fuel mobility, and power businesses can pose a burden to vulnerable groups, the EU is introducing a Social Climate Fund (SCF) along with the EU ETS2. The SCF is fed by a share of EU ETS2 auctioning revenues and the funds are distributed to Member States based on a mechanism that considers CO2 emission levels in the covered sectors and the likely size of the groups of vulnerable households, transport users and micro-enterprises in each country. Member States have to establish Social Climate Plans (SCPs) detailing how they will spend the available funds. There is a clear focus on supporting vulnerable groups via investments in energy efficiency improvements of their home or business, renewable heating and climate-friendly mobility, as the transition away from fossil fuels is a long-term insurance against rising fossil fuel costs and CO2 prices. As a transitional measure, Member States can also provide direct income support to the identified vulnerable group (EC n.d.). To prevent excessive price increases and high price volatility in the EU ETS2, the system includes several price stability mechanisms, including the Market Stability Reserve 2 (MSR 2) and a soft price ceiling of 45 EUR/tCO2. (EC n.d.). In October 2025, the European Commission announced to further strengthen these mechanisms (DG CLIMA 2025a). Figure 4-1 shows the sectoral share of emissions in ETS2 sectors by country in 2023. Across all EEA countries, road transport emissions contributed 60.8 % of the total emissions in EU ETS2 sectors. Emissions from the buildings and energy and industry sector made up 28.3 % and 10.9 %, respectively. ETC-CM Report 2025/06 51 Figure 4-1 EU ETS2 emission scope by sector and Member State in 2023 Note: The EU ETS2 emission scope was calculated backwards based on the sectors the system will cover. Source: Author's compilation based on data from EEA (2025a; 2025b). Road transport is responsible for the majority of emissions in EU ETS2 sectors in all EEA countries, with the exception of Liechtenstein. The highest road transport emission shares are observed in Iceland, Sweden, and Bulgaria, where road transport emissions contribute between 89.8 % and 84.7 % to the total national emissions in EU ETS2 sectors. Germany and Liechtenstein are the two EEA countries with the lowest share of road transport emissions in total emissions from EU ETS2 sectors, as a large part of their EU ETS2 emissions originate in the buildings sector. The buildings sector is typically the second biggest emitting sector amongst the three EU ETS2 sectors. The split between sectors depends on the fuel mix in those sectors in the individual countries. Countries where a lot of fossil fuels are burnt in individual boilers used for heating, have a higher share of buildings sectors emissions, whereas countries where homes are heated using renewables, electricity or district heating have a lower share of buildings sector emissions in overall emissions from EU ETS2 sectors. Emissions from the combustion of covered fuels in the energy and industry sectors not covered by the EU ETS1 represent around 10 % of total EU ETS2 emissions in most countries with some exceptions, like Romania and Czechia where energy and industry emissions represent 23.2 % and 19.1 % of ETS2 emissions, respectively. While Figure 4-1 shows that the three EU ETS2 sectors have a different importance across EEA countries, road transport will play an important role in the EU ETS2 across all EEA countries. The fuel mix in the heating sector and technologies used in the energy and industry sector will determine the specific mitigation strategies for the other EU ETS2 emissions in each country. 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% EU ETS2 IS SE BG MT LT DK CY EE PT SI NO LV FI ES LU HR AT FR EL IE PL SK CZ IT HU BE NL RO DE Road transport Buildings Energy & Industry non-ETS ETC-CM Report 2025/06 52 4.1 Emission trends Figure 4-2 shows the change in GHG emissions for stationary EU ETS1 emissions, emissions in EU ETS2 sectors, and total GHG emissions between 2015 and 2023 for EEA countries. In the EEA both emissions in the EU ETS1 and in EU ETS2 sectors decreased. EU ETS1 emissions fell by 32.7 % between 2015 and 2023 while emissions in EU ETS2 sectors declined by 6.7 %. Total gross GHG emission reductions (excluding LULUCF) across the EEA amount to 18.5 % between 2015 and 2023. Figure 4-2 Evolution of EU ETS and total GHG emissions by Member State, 2015-2023 Note: The EU ETS2 emission scope was calculated backwards based on the sectors the system will cover. Liechtenstein is excluded from the calculations due to a lack of data. The left axis shows the relative change in EU ETS emissions and the right axis shows the relative change in total gross GHG emissions excluding LULUCF emissions. Source: Author's compilation based on data from EEA (2025a; 2025b). In general, emission reductions in EU ETS1 sectors were larger than in the EU ETS2 sectors for all countries except for Sweden. 11 out of 29 countries even recorded an increase in emissions in the EU ETS2 sectors between 2015 and 2023. This was mainly driven by an increase in road transport emissions, with Romania’s road transport emissions rising by 42.4 % and Poland’s by 45.0 % over eight years. Total GHG emissions decreased in all EEA counties since 2015 apart from Croatia, Cyprus, and Malta, where emissions increased by between 4.6 % and 2.1 %. This increase was mainly driven by the increase in emissions in EU ETS2 sectors. The largest total emissions reductions were recorded in Estonia with a 39.4 % reduction and in the Netherlands and Germany with a 26.7 % and 25.5 % reduction, respectively. Figure 4-3 shows historic and projected emissions in the EU ETS1 and the scope of the EU ETS2 from 2005 to 2050. Emissions in the EU ETS1 have more than halved from around 2.1 Gt CO2 in 2005 to just above 1 Gt in 2023. In contrast emissions in EU ETS2 sectors have only decreased by 18.1 % over the same time period. -50% -40% -30% -20% -10% 0% 10% 20% -80% -60% -40% -20% 0% 20% 40% EEA MT HR CY IS LV PL IE LT SK RO SI HU IT AT NO SE BE FR ES CZ PT DK LU BG EL FI DE NL EE Total GHG emission development ETS emission development since 2015 EU ETS1 stationary EU ETS2 scope Total GHG emissions ETC-CM Report 2025/06 53 Figure 4-3 Historic and projected emissions of ETS1 and ETS2 Note: EU ETS1 numbers are excluding the UK. ETS1 emissions from 2005 to 2013 are adjusted to reflect the current scope of the EU ETS1. This alignment enables a consistent comparison over time by accounting for changes in scope, following the methodology established by Graichen et al. (2017). EU ETS2 emission scope was calculated backwards based on the sectors the system will cover. Dotted lines show the emission projections under a scenario with existing measures (WEM) and with additional measures (WAM). Source: Author's compilation based on data from EEA (2025a; 2025b). Estimates for historic emissions in EU ETS2 sectors show small fluctuations over the years, which reflect the general economic development of the Eurozone, e.g., the recession in 2008 or the sharp decline in economic activity in 2020 due to the COVID-19 pandemic, which led to a sharp decrease in emissions from one year to the next, especially in road transport related emissions. After these economic shocks, emissions in EU ETS2 sectors quickly rebound to pre-crisis levels. Starting in 2021, emissions in EU ETS2 sectors fell by around 80 Mt over two consecutive years. EEA countries’ project that emissions in both the EU ETS1 and EU ETS2 sectors fall steadily until 2050 (for details regarding the EU ETS1 projections see section 3). Emission projections for EU ETS2 sectors in the scenario reflecting current policies and the scenario including additional policy measures diverge substantially. While EU ETS1 emission projections show a maximum difference of 118.4 Mt CO2--eq between both scenarios in 2050, the EU ETS2 projections differ by 270.9 Mt CO2 in 2050. Under the more ambitious scenario EU ETS2 emissions are projected to fall to 202.0 Mt CO2 by 2050, whereas under current policies, emissions are only expected to decline to 472.8 Mt CO2. 0 500 1,000 1,500 2,000 2,500 2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 Emissions (Mt CO2-eq) ETS1 (stationary) ETS1 WEM ETS1 WAM ETS2 scope ETS2 scope WEM ETS2 scope WAM ETC-CM Report 2025/06 54 List of abbreviations Abbreviation Name EEA European Environment Agency EEA European Economic Area AFIR Alternative Fuels Infrastructure Development CRF Common Reporting Framework EEA European Environment Agency EEX European Energy Exchange EMSA European Maritime Safety Agency ENTSO-E European Network of Transmission System Operators for Electricity ETC CM European Topic Centre on Climate Change Mitigation EU ETS EU Emissions Trading Scheme EUA EU Allowances EUAA EU Aviation Allowances EUTL EU Transaction Log GT Gross Tonnage IMO International Maritime Organization LNG Liquefied Natural Gas MRV Monitoring, Reporting and Verification MSR Market Stability Reserve NER New Entrants Reserve RED Renewable Energy Directive SAF Sustainable Aviation Fuels TNAC Total Number of Allowances in Circulation WAM With Additional Measures WEM With Existing Measures ETC-CM Report 2025/06 55 References Bonnet, A. 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