The Romanian Senate has issued an opinion on the European Commission's proposal to amend Decision (EU) 2015/1814, concluding that the plan to cease the invalidation of allowances in the market stability reserve respects the EU principles of subsidiarity and proportionality. The opinion, sent to the President of the Council of the European Union on 9 June 2026, concerns the proposal under interinstitutional file 2026/0085 (COD).
The proposal, published by the Commission on 29 June 2026, aims to modify the market stability reserve (MSR) of the EU Emissions Trading System (ETS) by ending the automatic invalidation of surplus allowances. Currently, when the total number of allowances in circulation exceeds a certain threshold, a percentage is placed in the MSR, and if the reserve exceeds the previous year's auction volume, the surplus is permanently invalidated. The amendment would cease this invalidation, potentially increasing the supply of allowances and lowering carbon prices.
The Romanian Senate's positive opinion is a procedural step in the legislative process, as national parliaments scrutinize EU proposals for compliance with subsidiarity (whether the EU should act) and proportionality (whether the action is appropriate). No other national parliament has issued a reasoned opinion opposing the proposal within the eight-week deadline, which expired in late May 2026.
The proposal now proceeds to the European Parliament and the Council for adoption under the ordinary legislative procedure. The European Parliament's Committee on Environment, Public Health and Food Safety (ENVI) is expected to appoint a rapporteur in the coming weeks. The Council will need to reach a qualified majority to adopt the amendment.
Stakeholders are divided on the proposal. Industrial sectors covered by the ETS, such as steel, cement, and power generation, generally support ending invalidation as it would lower compliance costs and improve competitiveness. Environmental NGOs, however, argue that ceasing invalidation undermines the ETS's climate ambition by keeping more allowances in circulation, potentially delaying emission reductions. EU member states with ambitious climate targets, like Germany and the Netherlands, may push for compensatory measures to maintain the system's environmental integrity. The European Commission estimates that ending invalidation could reduce the carbon price by 5-10% by 2030, affecting revenues from allowance auctions that member states use for climate investments.