European Parliament votes to adjust ETS market stability reserve

The European Parliament has voted on two proposals aimed at maintaining stability within the European Union's emissions trading systems, ETS1 and ETS2. Regarding ETS1, the Parliament adopted its position to modify the market stability reserve by proposing to increase the threshold for the cancellation of excess quotas.

Currently, all quotas held in the reserve exceeding 400 million are cancelled. Members of Parliament have proposed raising this cancellation threshold from 400 million to 650 million, effective February 1, 2027. This move is intended to ensure a sufficiently large reserve to absorb supply and demand imbalances while preventing an excessive accumulation of quotas.

Relator Pierfrancesco Maran stated that the vote seeks a balance between climate ambition and industrial competitiveness, providing the necessary flexibility to safeguard the EU ETS. The Parliament is now prepared to enter negotiations with the Council regarding the final text.