On 24 June 2026, the Permanent Representatives Committee endorsed a final compromise text amending the market stability reserve (MSR) rules for the buildings, road transport and additional sectors under the EU Emissions Trading System (ETS). The changes aim to make the reserve more responsive to low allowance supply and price spikes, ensuring a stable and socially fair start for the new sectors.
The compromise amends Decision (EU) 2015/1814. Key changes include: allowances placed in the reserve that have not been released remain valid beyond 31 December 2030, deleting the old expiry date. If total allowances in circulation fall between 210 million and 260 million, additional allowances are released, calculated as 100 million minus twice the difference between the total and 210 million, added to Member State auctions from 1 September of that year. When allowances are released under the excessive price measure (Article 30h(2) of Directive 2003/87/EC), an extra 20 million allowances are added to the release. The Commission’s review of the new system must consider remaining allowances for both environmental integrity and social fairness. The decision will enter into force 20 days after publication in the Official Journal.
The compromise text will now be submitted to the European Parliament for approval. The new rules are expected to provide greater predictability for market participants and ensure that the ETS for buildings and road transport, which started in 2025, operates smoothly. The changes also aim to address concerns about potential price volatility and social impacts on households and small businesses.
The amendments benefit ETS participants in the new sectors by reducing the risk of allowance shortages and price spikes, but may increase costs for Member States if additional allowances are released, reducing auction revenues. Environmental groups may welcome the removal of the expiry date as it prevents a potential flood of allowances in 2030, but some may argue that the new release thresholds could weaken the carbon price signal. The European Commission gains flexibility in managing the reserve, but faces a broader review mandate that includes social fairness, which could lead to future adjustments.