The recession led to emissions from industrial plants included in the EU's emissions trading system (ETS) to drop by 11% in 2009, according to energy information provider ICIS Heren.
Overall, the EU handed out more free carbon allowances than were actually needed for plants to comply with their 2009 emissions. Though some plants still faced a shortfall in 2009, this number was smaller than the surplus held by others in the system.
As a result, most plants could earn money by selling surplus allowances, given to them for free by the EU. Steel and cement-makers posted the largest surplus, after their emissions dropped by 20-30%.
UK plants are among the few that received fewer carbon allowances than they need to comply with their ETS cap. They face a 15m shortfall, which would cost them around EUR 200 million at current over-the-counter carbon prices.
"The only thing keeping carbon prices from crashing to zero is the fact that plants can bank their emissions allowances to use later on, when emissions should start rising again because of tighter emission caps and an economic recovery," said Isabel Save, editor at ICIS Heren.
Plants can bank allowances until at least 2020, when the third trading period of the EU ETS ends.
"On a country-basis, the flow of money in the ETS will go from plants in the UK and Germany, which are short overall, to countries like Italy, Hungary, and Poland, which are long overall," Save said.
ICIS Heren data shows that carbon prices were stable just below EUR 13.00 per carbon credit on April 1, after the EU published the first preliminary data on 2009 emissions in the ETS.
Many power generators were still slightly short of EUAs in 2009 and expect to become even shorter over the next years, as emissions start to rise again. They are buying carbon allowances in the market to cover this, says ICIS Heren.
Industrial plants are holding on to their carbon allowance surplus, to cover future emissions caps and to sell at higher prices once the recession is over.