ETS: Parliament and Council agree to boost the MSR, raising the invalidation threshold allowances

Parliament and Council have reached a political agreement on the Commission’s proposal to amend the EU ETS market stability reserve, raising the invalidation threshold from 400 to 700 million allowances to support price stability, they announced on 21 October.

According to the co-legislators, under the current rules, all allowances in the reserve above 400 million are invalidated. Since the invalidation mechanism began in 2023, over 3 billion allowances have been invalidated and removed from the market, restoring balance between supply and demand and addressing the historical oversupply of allowances accumulated in the ETS, they stated.

The Commission proposed stopping the invalidation mechanism immediately and allowing an unlimited number of additional allowances to be held in reserve to…