Last year, EU emissions decreased by 8.3%, marking the largest drop ever recorded, except for 2020. Meanwhile, the economy, though stagnant, saw a 0.5% increase in GDP. Record reductions were achieved in emissions covered by the Emission Trading System (ETS), the carbon market that regulates a significant portion of the industry. Positive results were also seen in other sectors under the Effort Sharing Regulation (ESR), with the exception of agriculture and transport, which remained nearly at the previous year’s levels. These are the key findings from the EU’s 2023 greenhouse gas emissions report, published by the European Commission on October 31.
EU Greenhouse Gas Emissions Report 2023: Trends and 2030 Targets
With provisional data for 2023, the EU achieved a 37% emissions reduction from 1990 levels, while the GDP of the 27 Member States grew by 68%, showing a well-established trend of decoupling greenhouse gas emissions from economic growth.
Looking more broadly, the EU stands out as the region with the most significant emissions reduction among major polluters. Europe currently contributes 6.1% of global emissions, down from 14.9% in 1990, while its GDP, at purchasing power parity, remains around 15% of the global total.
The recent trajectory brings the EU close to its 2030 targets, though not quite there. In the short term, the 2023 greenhouse gas emissions report highlights that the post-Covid rebound effect has now fully subsided. For the first time in decades, Europe’s emissions fell below 3,000 million tons of CO2 equivalent (MtCO2eq), a more than 14% reduction from 2019 levels.
Between 2017 and 2023, the average annual reduction was 120 MtCO2eq, yet achieving the 2030 targets will require an annual decrease of at least 134 MtCO2 through the end of the decade.
EU ETS Emissions 2023: Record Drop in the Energy Sector
The energy sector was the “most significant driver” of emissions reduction in 2023, with energy generation emissions down 18% (-167 MtCO2eq) from 2022. This decrease is largely due to a substantial increase in renewable electricity production (mainly wind and solar), replacing both coal and gas. Electricity generation emissions fell by 24%, also aided by a reduction in electricity and heat demand (-3.1% and -2.3%, respectively). For the first time, renewables emerged as the leading source of electricity generation (44.7%), ahead of fossil fuels (32.5%) and nuclear (22.8%).
Lower production volumes and improved efficiency contributed to the emissions decrease in industry sectors covered by the ETS. Average emissions reductions in these sectors were 6% in 2023, with some high-energy sectors achieving around 8%. Overall, emissions in ETS sectors recorded a record 16.5% decrease, from 1,361.9 to 1,149.1 MtCO2eq, now 47.6% below 2005 levels and “on track” to meet the 2030 target of a 62% reduction. However, air transport remains an outlier, with a 9.5% increase.
EU ESR Emissions 2023: Good Results in Buildings, Weak in Agriculture and Automobiles
The sectors covered by the Effort Sharing Regulation (ESR) achieved more modest results. Overall, emissions fell by just 2% (-19.5% since 2005), with significant variation among sectors. Buildings saw the largest reduction at -5.6% from 2022, or 27 MtCO2eq, though this was largely due to an unusually mild winter.
Agriculture showed a limited decrease of only 2%, while transport, especially cars and heavy vehicles—which together account for about one-third of all ESR emissions—saw just a 0.8% drop. This underperformance occurred despite a 48.5% increase in electric vehicle adoption, with the EU fleet now reaching 4.5 million EVs.
The 2023 emissions report also details each Member State’s ESR emission trajectory, showing the gaps between their current paths and what is required to meet 2030 targets. Italy, for instance, faces a 14% shortfall with current measures, which reduces to 3% under the additional measures in its Integrated National Energy and Climate Plan (PNIEC), still falling short of national ESR targets. This gap will require Italy to purchase emission credits from countries exceeding their targets, potentially costing hundreds of millions of euros.
LULUCF Emissions: Still Off Track for 2030
The land use, land-use change, and forestry (LULUCF) sector showed positive progress, with an 8.5% increase in net carbon sink capacity (+20 MtCO2eq) compared to the previous year.
However, the EU remains off track for its 2030 targets. Projections indicate a shortfall of 45-60 MtCO2eq by the decade’s end, compared to the -42 MtCO2eq target. The report highlights that Poland, France, Sweden, Italy, Spain, and Germany are expected to face the largest gaps relative to their 2030 national targets.