The European Union has achieved a landmark 50% reduction in greenhouse gas emissions across sectors covered by its Emissions Trading System (EU ETS) since 2005, according to a new European Commission report. Emissions dropped 5% in 2024 alone, highlighting the EU ETS as a key driver in advancing ESG and carbon neutral strategy goals. 

The power sector led the decline, with electricity-related emissions falling 12% year-over-year. This progress was powered by a clean energy transition—solar generation surged by 19%, hydropower grew, and nuclear increased by 5%. Simultaneously, gas and coal usage dropped by 8% and 15% respectively, even as overall electricity production remained steady. 

The Commission emphasized that the consistent decline “confirms the effectiveness and efficiency of the EU’s cap and trade system as an important policy instrument for the decarbonisation of the European economy.” 

While the electricity sector made significant progress, industrial performance was mixed. Fertilizer sector emissions rose by 7%, matching a 6% production increase. Meanwhile, cement sector emissions declined by 5%, reflecting a corresponding drop in output. These variations underscore the complexity of applying a unified ESG approach across all industries. 

Aviation emissions saw a sharp 15% increase in 2024, partly due to expanded ETS coverage now including flights to and from the EU’s outermost regions. Despite this growth, the EU ETS remains a critical funding mechanism, with projected revenues of €40 billion between 2020 and 2030 aimed at reinforcing clean energy investment and regulatory reforms. 

As the EU tightens its emissions cap and expands the ETS scope, the system continues to serve as a cornerstone of the region’s climate policy. Its impact is central to the EU’s broader carbon neutral strategy and ongoing transition toward a sustainable, low-carbon economy. 

Sources : 

https://esgnews.com/eu-cuts-emissions-in-carbon-intensive-sectors-by-50-since-2005/ 

https://climate.ec.europa.eu/news-your-voice/news/eu-emissions-trading-system-has-reduced-emissions-sectors-covered-50-2005-2025-04-04_en