Greenhouse gas emissions from industrial installations covered by the European Union Emissions Trading System (EU ETS) decreased by 3.3% in 2025 compared with the previous year. During the same period, revenue from emissions allowance auctions increased by 11% to EUR 43.2 billion.
According to the European Commission’s 2026 Climate Action Progress Report and Carbon Market Report, published on 9 November, the iron and steel, cement, and chemical industries were the main contributors to the decrease in industrial emissions. While emissions decreased across most industrial sectors, emissions from the ceramics and aluminium industries increased by more than 2%.
Total emissions covered by the ETS, including electricity and heat generation, industry, aviation, and maritime transport, decreased by 2% year on year to approximately 1.16 billion tonnes of carbon dioxide equivalent. Emissions from electricity and heat generation decreased by 1.7%, while maritime transport emissions decreased by 4%. Aviation emissions, meanwhile, increased by 0.2%.
EUR 23.9 billion in auction revenue allocated to member states
Of the EUR 43.2 billion in auction revenue generated under the ETS in 2025, EUR 23.9 billion was allocated directly to EU member states. The Modernisation Fund received EUR 6.5 billion, the Innovation Fund EUR 2.6 billion, and the Social Climate Fund EUR 3.7 billion.
This amount represents revenue generated from emissions allowance auctions, rather than the total trading volume of the carbon market.
Commission stated that emissions reductions need to accelerate
According to provisional data, the EU’s total net greenhouse gas emissions also decreased by 1.6% year on year in 2025. As a result, emissions were 39% below 1990 levels, while the EU economy grew by 74% over the same period.
The Commission stated that the pace of emissions reductions had slowed compared with previous years and emphasized the need to accelerate reductions to meet the 2030 climate target. The EU aims to reduce net greenhouse gas emissions by at least 55% by 2030 compared with 1990 levels.
