Search Climate Insights Directory

The report identifies a trend of 'carbon leakage' where EU countries import electricity from non-EU 'offshore carbon havens'—specifically Turkey, Ukraine, Morocco, and the Western Balkans—that lack carbon pricing. Net imports into EU Emissions Trading System (ETS) countries rose from 3TWh in 2017 to 21TWh in 2019, with imported electricity emitting an estimated 26 million tonnes of CO2 in 2019. The document warns that up to 57GW of new coal power could be developed in connected or soon-to-be connected non-EU countries, potentially undermining EU emissions cuts. To address this, the authors propose a border carbon adjustment (BCA) for electricity imports to level the playing field for generators, protect low-carbon investments, and incentivise neighbouring states to adopt their own carbon pricing mechanisms.

The report finds that the EU ETS region is increasingly importing electricity from non-EU neighbors with high carbon intensities, effectively importing emissions and creating 'offshore carbon havens'. In 2019, the EU ETS region imported 26 million tonnes of CO2, with a net import of 20 million tonnes. The authors argue that the disparity in carbon pricing gives a competitive advantage to high-carbon generators in countries like Turkey, Ukraine, and the Western Balkans. To combat this, the report recommends a border carbon adjustment (BCA) on gross electricity imports to protect the integrity of EU climate policy and incentivize decarbonization in neighboring states. It also warns that planned increases in interconnection capacity (31% by 2030) and new coal power projects (up to 57GW) in connected non-EU countries will exacerbate the problem.

Ember argues that the UK's priority should be to remain within the EU Emissions Trading System (EU ETS) to maintain a shared Europe-wide approach to carbon pricing. The organization warns against the creation of a standalone UK ETS due to risks of market dysfunction and volatility, suggesting that if the UK must leave the EU ETS, it should implement a carbon tax on power, industry, and aviation with a price floor based on the previous year's average EU ETS price. Furthermore, Ember asserts that carbon pricing must be complemented by direct regulation and public funding to achieve net zero emissions.

The report finds that German lignite plants became significantly unprofitable in the first half of 2019, with the entire fleet losing €664 million. Old units (pre-1990) were hardest hit, with gross profits falling 62% to €188 million. The analysis suggests that 24/7 baseload operation is no longer economic and predicts a €1.8 billion loss for old units between 2020 and 2022. Consequently, the author recommends that the German government push for faster closures, reject excessive compensation claims, and implement a minimum carbon price to prevent future profitability.

In the first half of 2019, EU coal generation fell by 19%, driven by the growth of wind and solar power, a shift toward fossil gas due to rising carbon prices, and specific plant closures. Germany experienced the largest absolute decline, while eastern European countries saw smaller reductions due to slower renewable energy deployment. The report argues that while carbon pricing has made coal less profitable, further declines require accelerated plant closures and increased investment in clean energy and grid infrastructure to ensure a full transition.

The briefing argues that eligible EU Member States, primarily in Central Eastern Europe, should maximise the Modernisation Fund by transferring allowances from the Article 10c derogation and the Solidarity & Growth Provision. It concludes that the Modernisation Fund is more flexible and effective for energy transition than Article 10c, which has strict financing requirements and limited eligibility. The document also discusses the potential financial impact of Market Stability Reserve (MSR) recalculations on Member State auction revenues.

The analysis of draft NECPs reveals that the EU is set to miss its 2030 coal phase-out goals, with 11 Member States planning no phase-out and 60 GW of coal capacity projected to remain. The report highlights a disconnect where countries receiving EU just transition funding, such as Poland and Czechia, lack credible phase-out plans in their NECPs.

The report finds that currently agreed EU and Member State policies are on track to deliver a 50% reduction in greenhouse gas emissions by 2030 compared to 1990 levels, surpassing the existing 40% target. Using the E3ME model, the analysis suggests that further adjustments to coal phase-outs, energy efficiency, and electric vehicle penetration could increase this reduction to 58%. However, the report warns that the EU Emissions Trading System (ETS) remains vulnerable to a growing surplus of allowances as emissions fall faster than the current cap, necessitating reforms such as a one-off cap reset in 2026 to maintain a meaningful carbon price.

The report finds that ten companies were responsible for an estimated two-thirds of the health damage caused by EU coal power plants in 2016, including 7,600 premature deaths. RWE is identified as the most harmful company, with health costs of €5.4 billion in 2016. The analysis highlights that for many companies, the health costs imposed on society are similar in magnitude to the revenues they earn from selling coal-fired electricity. The report argues that companies are 'clinging to coal' through lack of retirement plans, continued investment in old plants, and lobbying for subsidies, and recommends a full phase-out of coal by 2030.

The report argues that the UK is on track to phase out coal by 2025 without needing new large gas plants. It finds that renewables, particularly offshore wind, and increased electricity imports via interconnectors will replace coal generation. Analysis of the Capacity Market shows that coal is being replaced by batteries, demand-side response, and small peaking gas plants rather than large combined cycle gas turbines (CCGTs). The report suggests that new large gas plants are incompatible with climate targets and would be unnecessarily costly due to low required load factors.

The report identifies that while decarbonisation opportunities exist, they are hindered by a low EU ETS carbon price, restrictive product benchmarks, and a lack of shared infrastructure. Stakeholders argue that the current ETS design encourages incremental improvements over breakthrough technologies and often penalises early adopters or those using low-carbon substitutes. Proposed solutions include updating benchmarks with recent data, expanding green public procurement, and integrating carbon pricing with trade policy to ensure global competitiveness.

The report argues that the UK can transition directly to clean power generation by 2025, bypassing the need for a 'gas bridge' of new large gas plants. It finds that renewables, particularly offshore wind, along with interconnectors and battery storage, are sufficient to replace coal capacity. The document suggests that relying on large gas plants would be costly and lock in higher emissions, recommending instead a focus on long-term storage innovation and policies to limit emissions from small peaking gas generators.

The agreed ESR reform requires only 14 Mt CO2 additional annual reductions for the EU28, which is approximately 0.5% of 2005 emissions, leaving the EU likely to miss its 2030 climate target. The document asserts that the non-ETS 2030 target would need to be tightened to at least -40% to align with the Paris Agreement. To achieve the current -30% target cost-effectively, the report advocates for project-based cooperation where higher-income Member States finance reductions in lower-income Member States. This mechanism could potentially generate up to 614 million AEAs in supply, compared to only 96 million AEAs without additional reductions.

The document warns that without a 550gCO2/kWh limit on capacity payments, Europe's 256 operational coal plants could be 'supercharged', potentially extending their design life from 40 to 60 years. It identifies multiple EU policy gaps—including low carbon prices, biomass co-firing, and mining cross-subsidies—that already favour coal. The author contends that poorly designed capacity markets risk crowding out flexible, low-carbon alternatives like batteries and demand-side response, arguing that clean capacity is already cheaper than extending old coal plants.

In 2017, renewables generated 30% of Europe's electricity for the first time, with wind, solar, and biomass overtaking coal generation. However, overall EU greenhouse gas emissions rose by approximately 1% due to increasing electricity consumption and a significant drop in hydro generation, which was the lowest this century. While Western European nations like the Netherlands, Italy, and Portugal announced coal phase-outs, Eastern European countries continued to rely on coal. The report also highlights the impact of the EU Emissions Trading System (ETS) reforms and the ongoing negotiations of the Clean Energy for All Europeans package.

The report examines biomass co-firing across Europe, noting that in Finland, Denmark, the Czech Republic, and Hungary, biomass is often used alongside fossil fuels. It argues that subsidies for co-firing can hinder the phase-out of coal and peat, specifically citing cases in Finland and the Netherlands where financial support may extend the lifetimes of fossil-fuel plants.

In 2016, the European power sector saw a significant shift from coal to gas generation, which drove a 4.5% decrease in CO2 emissions. While renewable energy's share of the electricity mix rose slightly to 29.6%, growth was below previous trends due to poor weather conditions, although record-low auction prices for wind and solar suggest future potential. Electricity consumption remained largely stagnant, barely offsetting economic growth. The EU Emissions Trading System (EU-ETS) continued to suffer from a structural oversupply, with the surplus exceeding 3 billion tonnes of CO2 for the first time.

The report 'Lifting Europe’s Dark Cloud' examines the health consequences of coal power emissions in Europe, highlighting that 22,900 premature deaths were caused by these plants in 2013. It argues that current EU legislation, specifically the Industrial Emissions Directive (IED), is undermined by widespread 'derogations' that allow over half of European coal plants to exceed safety limits. The authors model three scenarios, demonstrating that adopting the most stringent 'Best Available Techniques' (BAT) could reduce annual premature deaths from 8,900 (under proposed BREF limits) to 2,600, while slashing annual health costs from 24.3 billion to 7.1 billion euros. The document calls for the removal of legal loopholes, the immediate adoption of revised LCP BREF standards, and a total phase-out of coal in favor of renewable energy.

The report finds that EU coal-fired power plants were responsible for approximately 22,900 premature deaths in 2013, with health costs estimated between 32.4 and 62.3 billion Euros. A significant portion of these impacts is cross-border; for example, coal plants in Poland and Germany caused over 7,000 premature deaths in other countries. The analysis identifies the 'Toxic 30' plants responsible for 51% of these deaths and the 'Dirty 30' plants contributing nearly half of the EU coal fleet's CO2 emissions. The authors advocate for a full coal phase-out, structural reform of the EU Emissions Trading System, and the implementation of an Emissions Performance Standard to meet Paris Agreement goals.

The 2015 EU ETS emissions fell by 0.6% to 1802mt, driven by a 0.6% decrease in power and heat emissions and a 0.3% decrease in industrial emissions. Notable national trends include a 23% drop in UK coal power emissions and an 11% increase in Netherlands power emissions due to new coal plants. The report highlights a long-term trend of renewables displacing fossil fuels in the European power sector.