EuroWire, BRUSSELS: Verified emissions from sectors covered by the European Union’s carbon market fell 1.3% in 2025 from a year earlier, extending a long-running decline in pollution from power generation, heavy industry, aviation and maritime transport. The European Commission said the latest data showed the EU Emissions Trading System continued to cut emissions in the areas it regulates, with covered emissions now about half their 2005 level. The bloc said the market remains aligned with its goal of reducing emissions in those sectors by 62% by 2030.
The EU Emissions Trading System, launched in 2005, is the bloc’s central carbon pricing mechanism and applies to electricity and heat generation, industrial manufacturing and aviation, with maritime transport added to the system from 2024. The Commission says the scheme covers roughly 40% of total greenhouse gas emissions in the European Union. Companies regulated under the system must monitor annual emissions and surrender enough allowances to match them, with the cap on total allowances tightening over time.
In the power sector, emissions from fossil fuel combustion fell 0.4% in 2025 even as net electricity generation in the European Union rose 1.7% from the previous year. The Commission said renewable sources accounted for 47.3% of the bloc’s electricity generation in 2025, slightly above 47.2% in 2024. The figures point to a power mix that remained near record renewable levels while electricity demand recovered modestly, helping keep overall emissions in the sector on a downward path despite changes in weather and generation patterns.
Power mix shifts
Solar power posted the strongest growth among renewable sources, rising 24.6% from 2024, and the increase was enough for solar to overtake hydropower for the first time as the European Union’s second largest renewable electricity source after wind. The Commission said weaker wind speeds and lower rainfall in northern Europe reduced wind and hydro generation during the year, but expanding solar capacity helped offset part of that shortfall and limited the effect on overall emissions from the electricity system.
Total electricity generation from fossil fuels nevertheless increased 3.5% in 2025, reflecting a mixed picture inside the power market. Coal power emissions fell 6.8% from the previous year, while electricity generation from natural gas rose 11.4%. That combination showed how the region’s lower carbon sources continued to gain ground even as gas-fired generation remained an important balancing source in periods of weaker wind and hydro output. The overall direction of emissions in the sector, however, remained lower on the year.
Industry and transport trends
Emissions from energy-intensive industries declined 2.5% in 2025, led mainly by the cement sector and by iron and steel production. The Commission said available data indicated the reduction was linked in part to weaker activity in construction and other parts of the economy, alongside ongoing industrial changes associated with the clean energy transition. While trends varied across sectors, the overall industrial reading added to evidence that the emissions cap and related market signals continue to influence production patterns across some of Europe’s heaviest emitters.
For transport covered by the system, emissions from aircraft operators rose slightly from 2024 as traffic increased, while reported maritime emissions fell by about 3%, according to data released so far. Taken together, the latest verified figures underscored a year of uneven sector performance but a continued decline in emissions across the market as a whole, reinforcing the EU carbon market’s role in the bloc’s wider climate framework and long-term emissions reduction strategy.