Revision of the market stability reserve for the EU emissions trading system: Fit for 55 package [EU Legislation in Progress]

Written by Henrique Morgado Simões (5th edition, updated on 17.05.2023).

The proposal to revise the market stability reserve (MSR) for the EU emissions trading system (ETS) consists of prolonging its current parameters. Under the current rules, the intake rate of allowances to the MSR and the minimum allowances placed in the reserve have been doubled until the end of 2023, to allow for a quick removal of surplus EU ETS allowances. The proposal is aimed at maintaining the current doubled intake rate (24 %) and minimum number of allowances placed in the reserve (200 million) until 31 December 2030, the end of Phase IV of the EU ETS.

In Parliament, the file was assigned to the Committee on the Environment, Public Health and Food Safety (ENVI), which adopted its report on 15 March 2022. On 5 April 2022, the Parliament adopted its position, with amendments to the recitals. The Council adopted its general approach on 29 June 2022. Trilogue negotiations began on 6 September 2022 and a provisional agreement was reached on 16‑17 December 2022, amending the proposal’s recitals but keeping the articles unchanged. On 19 April 2023, the final act was signed, and on 25 April 2023 it was published in the Official Journal of the European Union. The decision entered into force on 15 May 2023.

Versions

• May 2023: Revision of the market stability reserve for the EU emissions trading system: Fit for 55 package (5th edition)