Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC

Summary:

Decision (EU) 2015/1814 - adopted by the European Union on 6 October 2015 - concerning the establishment and operation of a market stability reserve (MSR). This is a text with EEA relevance.

Further information:

The reserve was designed to address the market imbalance in the EU's emissions trading system (ETS) and improve its resilience to future unexpected and sudden demand shocks (by reducing the surplus of carbon credits available for trading in order to support the price). It creates a system that automatically takes a portion of ETS allowances off the market and into the reserve if the surplus exceeds a certain threshold. In the opposite scenario, allowances could be returned to the market. This Decision amends Directive 2003/87/EC (also known as EU ETS Directive).

The proposal was put forward by the European Commission on 22 January 2014, alongside a Communication setting out a policy framework on climate and energy for 2020-2030. An informal agreement between the co-legislators on a compromise text was reached on 5 May 2015. This was formally endorsed by the European Parliament on 8 July, followed by the Council of the European Union on 18 September. The Decision was signed on 6 October and published on the Official Journal on 9 October.

• Primary Source

Commentary and Analysis

EPRS: Blog Keysource, 23/01/2015: ETS market stability reserve https://epthinktank.eu/2015/01/23/ets-market-stability-reserve/

LSE: EUROPP Blog, 24/04/2015: Some much needed momentum is finally building behind the EU’s emissions trading system http://bit.ly/1OjcsGT

IETA: Press Release, 05/05/2015: IETA comment on EU’s Market Stability Reserve agreement https://www.ieta.org/page-18192/3907009

EPRS: At a Glance, June 2015: ETS Market Stability Reserve http://www.europarl.europa.eu/thinktank/en/document.html?reference=EPRS_ATA(2015)564362

EurActiv, 03/07/2015: Time for pollution pricing to work for the climate https://www.euractiv.com/section/energy/opinion/time-for-pollution-pricing-to-work-for-the-climate/

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News

Bloomberg, 13/01/2015: EU Nations to Discuss Latvia Bid to Strengthen Carbon Fix https://www.bloomberg.com/news/articles/2015-01-13/eu-nations-to-discuss-latvia-bid-to-strengthen-carbon-fix

EurActiv, 22/01/2015: MEPs fail to agree on carbon market reform start date https://www.euractiv.com/section/energy/news/meps-fail-to-agree-on-carbon-market-reform-start-date/

EUObserver, 22/01/2015: EP committee strikes down own report on carbon fix https://euobserver.com/environment/127334

EUObserver, 23/01/2015: Industry committee 'silenced' itself on EU carbon rules https://euobserver.com/environment/127352

EUObserver, 04/02/2015: Political statements cause swings in EU carbon prices https://euobserver.com/environment/127481

EurActiv, 13/02/2015: EU politicians edge towards 2018 start date for carbon reform https://www.euractiv.com/section/energy/news/eu-politicians-edge-towards-2018-start-date-for-carbon-reform/

EurActiv, 23/02/2015: MEPs, member states at odds over ETS reform start https://www.euractiv.com/section/energy/news/meps-member-states-at-odds-over-ets-reform-start/

The Guardian, 24/02/2015: European carbon market reform set for 2019 https://www.theguardian.com/environment/2015/feb/24/european-carbon-emissions-trading-market-reform-set-for-2019

EurActiv, 25/02/2015: European Parliament hopes to revive carbon market in 2019 https://www.euractiv.com/section/climate-environment/news/european-parliament-hopes-to-revive-carbon-market-in-2019/

The Parliament Magazine, 25/02/2015: ETS 'back on track' thanks to market stability reserve https://www.theparliamentmagazine.eu/articles/news/ets-back-track-thanks-market-stability-reserve

EUObserver, 25/02/2015: MEPs call for emissions trading reform to start in 2019 https://euobserver.com/environment/127783

EUObserver, 26/02/2015: Poland against quick rescue of emissions scheme https://euobserver.com/environment/127810

EurActiv, 14/04/2015: Poland says allowances, not reforms start date, focus of carbon talks https://www.euractiv.com/section/energy/news/poland-says-allowances-not-reforms-start-date-focus-of-carbon-talks/

EurActiv, 28/04/2015: Latvian Presidency proposes 1 January 2019 as start of reformed CO2 market https://www.euractiv.com/section/energy/news/latvian-presidency-proposes-1-january-2019-as-start-of-reformed-co2-market/

Politico, 04/05/2015: EU edges towards emissions trading reform https://www.politico.eu/article/eu-edges-towards-emissions-trading-reform/

EurActiv, 05/05/2015: Czechs paving way towards carbon market reform https://www.euractiv.com/section/climate-environment/news/czechs-paving-way-towards-carbon-market-reform/

The Guardian, 06/05/2015: EU agrees 'landmark' carbon market deal https://www.theguardian.com/environment/2015/may/06/eu-agrees-landmark-carbon-market-deal

EUObserver, 06/05/2015: EU market mechanism to boost carbon price https://euobserver.com/environment/128596

EurActiv, 07/05/2015: EU agrees ‘landmark’ carbon market deal https://www.euractiv.com/section/climate-environment/news/eu-agrees-landmark-carbon-market-deal/

Politico, 03/06/2015: EU pushes expansion of flawed emissions scheme https://www.politico.eu/article/eu-pushes-expansion-of-flawed-emissions-scheme/

EurActiv, 07/07/2015: MEPs set to back carbon market 2019 reform start https://www.euractiv.com/section/energy/news/meps-set-to-back-carbon-market-2019-reform-start/

EurActiv, 09/07/2015: MEPs clear reform of carbon market https://www.euractiv.com/section/climate-environment/news/meps-clear-reform-of-carbon-market/

EurActiv, 14/07/2015: Developing countries eye EU carbon quota sales to fuel growth https://www.euractiv.com/section/development-policy/news/developing-countries-eye-eu-carbon-quota-sales-to-fuel-growth/

Bloomberg, 15/05/2019: Price of Carbon Set to Rise in EU as Supply of Permits Shrinks https://www.bloomberg.com/news/articles/2019-05-15/price-of-carbon-set-to-rise-in-eu-as-supply-of-permits-shrinks

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Official

European Commission: DG Climate Action: Market Stability Reserve https://ec.europa.eu/clima/policies/ets/reform_en

EUR-Lex: COM(2014)20: Proposal for a Decision concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme and amending Directive 2003/87/EC http://eur-lex.europa.eu/legal-content/EN/HIS/?uri=COM:2014:020:FIN

EUR-Lex: SWD(2014)17: Impact assessment http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2014:017:FIN

EUR-Lex: SWD(2014)18: Executive summary of the impact assessment http://eur-lex.europa.eu/legal-content/EN/TXT/?uri=SWD:2014:018:FIN

European Parliament: Legislative Observatory: Procedure File for Proposal on Union greenhouse gas emission trading scheme: establishment and operation of a market stability reserve https://oeil.secure.europarl.europa.eu/oeil/popups/ficheprocedure.do?reference=2014/0011(COD)

EP: Legislative Train: Market Stability Reserve for the EU Emission Trading System http://www.europarl.europa.eu/legislative-train/theme-resilient-energy-union-with-a-climate-change-policy/file-market-stability-reserve-for-the-eu-ets/06-2019

European Commission: MEMO, 22/01/2014: Questions and answers on the proposed market stability reserve for the EU emissions trading system http://europa.eu/rapid/press-release_MEMO-14-39_en.htm

European Parliament: Press Release, 24/02/2015: Environment Committee backs ETS market reserve, advocates early start http://www.europarl.europa.eu/news/en/news-room/content/20150223IPR24703/

European Parliament: Headlines, 26/02/2015: ETS reform: everything you need to know in a nutshell http://www.europarl.europa.eu/news/en/headlines/society/20150225STO26902/

Council of the European Union: Press Release, 25/03/2015: Market stability reserve: Council ready to negotiate with the European Parliament http://www.consilium.europa.eu/en/press/press-releases/2015/03/25-market-stability-reserve-council-ready-negotiate-ep/

Council of the European Union: Press Release, 05/05/2015: Market stability reserve: Council takes important step towards the reform of EU Emissions Trading System https://www.consilium.europa.eu/en/press/press-releases/2015/05/05/reform-eu-emissions-trading-system/

European Parliament: Press Release, 06/05/2015: ETS market stability reserve: MEPs strike deal with Council http://www.europarl.europa.eu/news/en/press-room/20150504IPR49654/

Council of the European Union: Press Release, 13/05/2015: Market stability reserve: agreement with European Parliament approved https://www.consilium.europa.eu/en/press/press-releases/2015/05/13/market-stability-reserve/

European Parliament: Press Release, 26/05/2015: CO2 market fix: Environment Committee MEPs back deal with Council http://www.europarl.europa.eu/news/en/news-room/content/20150526IPR59608/

European Parliament: Press Release, 08/07/2015: Parliament adopts CO2 market stability reserve http://www.europarl.europa.eu/news/en/news-room/content/20150703IPR73913/

Council of the European Union: Press Release, 18/09/2015: Greenhouse gas emissions: creation of a market stability reserve approved https://www.consilium.europa.eu/en/press/press-releases/2015/09/18/greenhouse-gas-emissions-creation-of-market-stability-reserve-approved/

European Commission: DG Climate Action: Mews, 15/05/2019: ETS Market Stability Reserve to reduce auction volume by almost 400 million allowances between September 2019 and August 2020 https://ec.europa.eu/clima/news/ets-market-stability-reserve-reduce-auction-volume-almost-400-million-allowances-between_en

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