Greenhouse gas emissions regulated by the EU Emissions Trading System fell by just under 0.4% in 2015 from the previous year, according to the EU's executive arm, the European Commission.
The figures closely match a Platts analysis of partial CO2 data released by the EC April 1 which forecast that emissions fell by 0.47% in 2015 from the previous year.
The overall surplus of allowances in the system fell by about 300 million mt of CO2 equivalent to 1.78 billion mt in 2015, the EC said, due to the "backloading" of 300 million mt of allowances from auctions in 2015, combined with stable emissions.
Without backloading, the surplus would have been almost 40% higher at the end of 2015, the EC said in a statement Thursday.
Regulated emissions from stationary installations in 2015 stood at 1.8 billion mt, the EC said, while aviation's emissions contributed a further 56.9 million mt, making a total of 1.8569 billion mt.
Platts used initial data released April 1 to forecast that 2015's emissions, including aviation, would stand at 1.8597 billion mt.
Two other factors contributed to the reduced supply of allowances in 2015, the EC said.
Firstly, 200 million fewer international emissions credits were exchanged for EU carbon allowances in 2015 compared with the previous year, reflecting the 2014 deadline to exchange credits from the first commitment period of the Kyoto Protocol.
Secondly, no allowances were monetized in 2015 from the New Entrant Reserve 300 program, which provides funding for low-carbon technology demonstration projects, compared with 100 million allowances sold under the program in 2014, the EC said.
"The good news is that the EU ETS emissions dropped slightly last year, which confirms the decreasing trend over the last five years," EU climate action and energy commissioner Miguel Arias Canete said, quoted in the statement.
"Also, 2015 marks the first year in which the surplus shrank considerably on the European carbon market -- thanks to the backloading of allowances," he said.
"This shows that our efforts to address the serious market imbalance start to bear fruit. But backloading is just the beginning. The Market Stability Reserve will need to complete the work," he said.
The EC proposed the MSR in January 2014 and following agreement between the EU Parliament and Council, it passed into law in October 2015.
Under the agreed rules, the reserve will start withholding 12% of the net surplus each year starting 2019 if the surplus is above 833 million mt, and release 100 million mt per year if the surplus falls below 400 million mt.
In May 2017, the EC will publish the first surplus indicator which will be used to determine how many allowances will be fed into the reserve when it becomes operational in 2019.
