MEPs have backed changes to the EU’s carbon market rulebook, voting on separate proposals to amend the market stability reserve for two emissions trading systems.
The market stability reserve is a mechanism used to adjust the supply of emissions allowances — permits to emit CO₂ — in order to help keep prices stable, the European Parliament announced on Tuesday.
Under the current EU emissions trading system, known as ETS1, any allowances held in the reserve above 400 million are cancelled.
The European Commission has proposed ending that cancellation rule so the extra allowances can be kept as a buffer.
MEPs voted to keep the cancellation mechanism but raise the threshold from 400 million to 650 million allowances from 1 February 2027.
The proposal was backed by 367 votes to 240, with 59 abstentions.
Parliament is now ready to start negotiations with EU member states in the Council on the final text.
Separate vote backs ETS2 changes
In a separate vote, MEPs adopted a provisional agreement with the Council to amend the market stability reserve for ETS2 — a newer emissions trading system covering buildings, road transport and additional sectors — the Parliament said.
The ETS2 agreement was approved by 467 votes to 158, with 41 abstentions, it added. The changes are intended to cushion consumers against sharp price swings.
Once the Council adopts the ETS2 deal, it will enter into force 20 days after publication in the EU Official Journal.
The market stability reserve has been in operation since 2019 to address an imbalance between supply and demand of allowances by reducing or increasing the total number in circulation.
