UK emissions drop 4% in 2024 on reduced gas and coal use

UK greenhouse gas emissions fell 4% last year, driven by reductions from the electricity and industrial sectors, the Department for Energy Security and Net Zero said March 27.

Emissions in 2024 were recorded at 371 million mtCO2e compared with 385 million mtCO2e the previous year due to reduced gas and coal use in key sectors, provisional data showed. When compared to levels in 1990 -- used as a key reference year by many countries -- emissions were down 54%.

Levels from the electricity sector fell 15% year over year due to higher imports, greater renewable generation, and the closure of the UK's last coal-powered station in September 2024.

The UK continues to be increasingly powered by wind, solar, and other renewable sources. On peak days, renewables can account for over 50% of UK generation output. UK renewables outperformed fossil fuels in 2024, rising by 7% and generating 51.3% of the country's electricity, the data showed.

"The long-term decrease in electricity supply sector emissions has mainly resulted from changes in the mix of fuels being used for electricity generation with a switch from coal to natural gas and growth in the use of renewable energy sources, combined with greater efficiency resulting from improvements in technology and a decline in the relative importance of energy-intensive industries," the report released by the government said.

Carbon price impact

The fall in emissions weighed on UK and EU carbon prices, along with bearishness after the US announced tariffs on car imports.

UK Allowances were at GBP44.35/mtCO2e ($48.29/mtCO2e) at 1247 GMT on March 27, a fall of over 3% from the previous settlement.

Platts, part of S&P Global Commodity Insights, assessed UKAs for December delivery at GBP46.44/mtCO2e on March 26.

Speaking on the data released by the UK, a carbon trader said it signified "a reasonable reduction in carbon output."

"Analyst estimates on carbon annual output are around 5%-6% reduction in emissions in Europe year over year," the trader added.

The EU is set to release its provisional 2024 emissions data in early April.

Prices for UKAs had been rising sharply following reports of a potential linkage with the EU Emissions Trading System, with the UKA December 2025 contract hitting an eight-month high of GBP4.41/mtCO2e on Feb. 10. The spread to the December 2025 EUA has also been narrowing as a consequence, with the price difference dropping below Eur20/mtCO2e.

Industrial decline

Industrial emissions fell by 9% on blast furnace closures in the iron and steel industry and lower coal use across the sector, reflecting broader economic concerns affecting the country's manufacturing and industrial sectors.

Domestic transport, which consists of emissions from road vehicles, domestic aviation, shipping, and railways was the highest emitting sector in 2024, accounting for 30% of all emissions.

Emissions from UK-based international aviation fuel increased 9% last year and were 0.1% higher than in 2019, the year before the COVID-19 pandemic.

The UK Emissions Trading Scheme, which became operational in 2021, regulates CO2 emissions from power generation, emissions-intensive heavy industries and aviation -- a similar sectoral scope to the EU ETS.

The UK has set a target to reduce emissions by 81% by 2035 compared with 1990 levels before reaching net zero by 2050.