#52026PC0153Proposal to amend Decision (EU) 2015/1814 to cease invalidation of allowances in the EU Emissions Trading System Market Stability Reserve
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This law proposes to amend the existing EU decision regarding the Market Stability Reserve (MSR) within the EU Emissions Trading System (ETS). It seeks to cease the invalidation of emissions allowances held in the reserve, which was previously mandated to improve market stability. The proposal aims to increase the number of allowances in the MSR, thus providing a buffer for future market demands and enhancing liquidity in the carbon market.
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Key Changes
- Ceasing the invalidation of allowances held in the Market Stability Reserve.
- Increasing the number of allowances available in the reserve to provide future liquidity.
- Targeting amendments to parameters of the Market Stability Reserve for better market stability.
Obligations
What this law requires
Cease invalidation of allowances held in the Market Stability Reserve (MSR) above the 400 million allowance threshold
Allow a greater number of allowances to remain in the MSR rather than invalidating them to provide liquidity buffer for future market tightness after mid-2030s
Maintain the fixed threshold of 400 million allowances in the MSR to ensure predictable reserve levels
Continue monitoring the functioning of the MSR and conduct regular reviews based on analysis of EU ETS allowance market
Conduct an in-depth forward-looking analysis to assess appropriateness of MSR parameters for intake and release mechanisms in the upcoming 2026 review