Decarbonization Pathways in the European Union: Sectoral Contributions to CO2 Emissions Reductions (2000–2022)

In the European Union, decarbonization has progressed unevenly across sectors and member states. This study examines sectoral CO2 trajectories in the EU-27 during 2000–2022 using a harmonized annual panel built primarily from the European Commission’s Energy Statistical Country Datasheets and complemented with EDGAR/JRC sectoral emissions data. The empirical strategy combines descriptive analysis with OLS, fixed-effects, log-linear, and exploratory difference-in-differences specifications to assess conditional associations among per capita CO2 emissions, the renewable energy share, GDP per capita, and the carbon price. EU-wide CO2 emissions declined by 26.4% over the study period, with the largest contraction in the energy sector, while transport emissions remained comparatively stable. Across specifications, renewable energy share is consistently associated with lower emissions, although its magnitude weakens after controlling for time-invariant country heterogeneity. Carbon price is negatively associated with emissions in the baseline and log-linear models. In contrast, the exploratory DiD interaction is not statistically informative in the main treatment specification and yields negligible effect sizes in regional split models. The sign reversal in GDP between the pooled and within-country models indicates that cross-country differences and within-country dynamics should not be treated as equivalent. Overall, the findings support a heterogeneous and multi-speed decarbonization pattern and suggest that carbon pricing is better understood as part of a broader policy mix rather than as a stand-alone causal driver.