Early review of the ETS Market Stability Reserve

A coalition of NGOs argues that the European Commission's plan to modify the EU ETS Market Stability Reserve (MSR) is premature and risks undermining the carbon price signal. They highlight that the MSR has invalidated 3.4 billion allowances since its inception and is essential for managing structural oversupply of allowances, which is expected to persist until 2031. The authors contend that weakening the MSR could increase greenhouse gas emissions after 2030 and hinder the EU's 2040 climate target.

• The Market Stability Reserve (MSR) has effectively managed carbon price stability and climate benefits by invalidating 3.4 billion ETS allowances since its creation, with approximately 300 million allowances invalidated annually over the last three years.
• The EU ETS suffers from a structural oversupply of allowances that exceeds demand, a condition projected to continue until at least 2031.
• Proposed changes to the MSR may disrupt the market's supply-and-demand balance, potentially increasing greenhouse gas emissions after 2030 and jeopardizing the EU's 2040 climate target.

APA

Frank, S. (2026). Early review of the ETS Market Stability Reserve. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2026/03/20260325_Joint-NGO-MSR-letter_FINAL.pdf

Chicago

Frank, Sabine. Early review of the ETS Market Stability Reserve. Carbon Market Watch, 2026. https://carbonmarketwatch.org/wp-content/uploads/2026/03/20260325_Joint-NGO-MSR-letter_FINAL.pdf.

Wikipedia

{{cite press release |last1=Frank |first1=Sabine |title=Early review of the ETS Market Stability Reserve |publisher=Carbon Market Watch |date=25 March 2026 |url=https://carbonmarketwatch.org/wp-content/uploads/2026/03/20260325_Joint-NGO-MSR-letter_FINAL.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{frank2026early, author = {Frank, Sabine}, title = {{Early review of the ETS Market Stability Reserve}}, publisher = {Carbon Market Watch}, year = {2026}, month = mar, url = {https://carbonmarketwatch.org/wp-content/uploads/2026/03/20260325_Joint-NGO-MSR-letter_FINAL.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }