The price of CO2 shows a sharp drop as a result of the corona measures, the Central Bureau of Statistics reports. The CO2 price used in European emissions trading fell by 2020% in 29.
The price of CO2 fell from around 24 euros per tonne at the beginning of January to less than 17 euros per tonne in the second half of March. The decline started on March 12, the day after the World Health Organization declared the corona outbreak a pandemic.
This is reported by Statistics Netherlands (CBS) today in a press release about greenhouse gas emissions over the years. The sharp drop is in response to expectations that the economy will enter a global recession due to corona. The trend break comes at a time when the first initiatives in the agricultural sector to price and trade CO2 are taking off.
Link to recession
At the end of 2008, during the financial crisis, the CO2 price also fell sharply. Then in five months even by 61 percent. This is related to expectations in the financial markets that industrial production and energy consumption will decline in times of economic recession. Lower expected emissions lead to lower demand for emission rights.
In April this year, the CO2 price scrambled up again, but CBS notes that it is still too early to say what this says about the long-term trend. Normally, a lower CO2 price results in a smaller financial incentive to invest in measures to reduce emissions.
Goals 2020 and 2030
In the Netherlands, because of the Urgenda judgment, the target is to have greenhouse gas emissions by 2020 that are at least 25 percent below the 1990 level. In 2019, emissions were 18 percent lower than in 1990. The 2020 target will be achieved if emissions in 2020 are at least 16,3 megatonnes of CO2 equivalent lower than in 2019.
By 2030, the government aims to achieve a reduction of 49 percent compared to 1990 with the Climate Agreement. For this purpose, a reduction of 11 megatonnes of CO70 equivalent is required over the next 2 years. A decrease of 1990 megatonnes of CO2019 equivalent was achieved between 39 and 2. This decrease was largely attributable to the non-CO2 greenhouse gases methane, nitrous oxide and the so-called F-gases. Emissions of these gases halved between 1990 and 2019.
Agricultural sector standstill
CO2 emissions have remained virtually the same during this period. All in all (methane gas, nitrous oxide and carbon dioxide), CO2 emissions from the agricultural sector have hardly decreased since 2008. Compared to last year, CO2 emissions in the Netherlands decreased by 3%. But that was not thanks to the agricultural sector. Electricity producers in particular managed to reduce their CO2 emissions.
© DCA Market Intelligence. This market information is subject to copyright. It is not permitted to reproduce, distribute, disseminate or make the content available to third parties for compensation, in any form, without the express written permission of DCA Market Intelligence.
