European Parliament in favour of ETS reform tool

Climate action

Today the European Parliament adopted the Market Stability Reserve (MSR), which will temporarily remove some of the gigantic surplus of pollution permits in the EU Emissions Trading Scheme.

CAN Europe welcomes the vote as a positive step but stresses that what needs to follow are much more significant revisions to make the ETS an effective climate policy. Next week, the European Commission is expected to release their proposal for an ETS reform for after 2020.

Anja Kollmuss, EU ETS Policy Coordinator at CAN Europe said: “Today’s vote is a welcome step. But to turn the ETS from a paper tiger into a tool that helps Europe cut its addiction to fossil fuel it needs substantial reforms. These include the permanent removal of the billions of excess pollution permits. It is also crucial that industry hand-outs stop that the money is instead invested in climate protection in Europe and in poorer nations.”

The MSR in more detail:

-the MSR will start on January 1st 2019, with 8% of surplus transferred in 2019 and 12% from 2020 onwards
-900 million back-loaded allowances will be put directly in the reserve
-around 750 million unallocated allowances will be placed in the reserve, but what will ultimately happen to them will be decided in the upcoming ETS review. Options are to cancel them or to use them to address carbon leakage
-wealthier member states have agreed that up until 2025 they will contribute more allowances to the reserve to facilitate an agreement with some poorer countries that had resisted an earlier start date. This means three clusters of allowances are excluded from the MSR: phase 3 solidarity and growth allowances, the phase 4 modernisation fund, and the phase 4 solidarity, growth and interconnection allowances. This will result in a redistribution of around 14 million pollution permits from wealthier Member States to poorer ones.



Anja Kollmuss, EU ETS policy coordinator at CAN Europe,, +49 1 573 401 3307

Joop Hazenberg, CAN Europe Communications Coordinator,,+32 496 70 36 38

Climate Action Network (CAN) Europe is Europe’s largest coalition working on climate and energy issues. With over 120 member organisations in more than 30 European countries, CAN Europe works to prevent dangerous climate change and promote sustainable energy and environment policy in Europe. CAN Europe represents 44 million citizens who support the work of its members.


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