<p>          The summary of this document was written by researchers at the <a href="http://lse.ac.uk/grantham" target="_blank"> Grantham Research Institute </a> .           If you want to use this summary, please check <a href="https://www.lse.ac.uk/granthaminstitute/cclw-terms-and-conditions" target="_blank"> terms of use </a> for citation and licensing of third party data.</p>

Laws and Policies

CCLW

CCLW national policies

 Decision (EU) 2015/1814 on the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme (Consolidated text)

Decision (EU) 2015/1814  - market stability reserve for the Union greenhouse gas emission trading scheme

Directive (EU) 2023/959 amending Decision (EU) 2015/1814 concerning the establishment and operation of a market stability reserve  

Directive (EU) 2018/410

Decision (EU) 2023/852 of the European Parliament and of the Council of 19 April 2023 amending Decision (EU) 2015/1814 as regards the number of allowances to be placed in the market stability reserve for the Union greenhouse gas emission trading system until 2030

Amended

Published

<p>This decision determines that a Market stability reserve shall be operational from 2019 onwards. It stipulates the quantity of 900 million allowances to be put in the reserve market. Under the rules governing the Market Stability Reserve (MSR) of the EU Emissions Trading System (EU ETS), the European Commission is required to publish the total number of allowances in circulation (TNAC) each year by 1 June of the following year. This figure reflects the cumulative balance of allowances since 1 January 2008 and serves as a key input for determining whether allowances should be added to or withdrawn from the MSR in order to maintain market stability. The TNAC is calculated by summing the total number of allowances issued for installations and shipping companies since 2008, excluding those that have already been placed in the reserve. This total also includes allowances issued under Article 13(2) of Directive 2003/87/EC (as it stood on 18 March 2018), and any entitlements used for international credits under the EU ETS. From this total, the cumulative verified emissions from installations and shipping companies since 2008 are subtracted.As of 2024, the scope of this calculation has expanded to include the aviation sector. Specifically, the TNAC now also accounts for the cumulative number of allowances issued in respect of aviation, as well as the cumulative verified aviation emissions from 1 January 2024 onward.Moreover, starting in 2027, the EU Emissions Trading System (EU ETS) will expand to cover additional sectors (buildings, road transport), under Chapter IVa of Directive 2003/87/EC. To ensure market stability in these new sectors, the existing Market Stability Reserve (MSR) will be adapted to include them, but with separate rules and a dedicated reserve structure. A separate and independent section of the MSR will be created specifically for these new sectors and the operation will start in 2028.This decision also amended the <a href="https://app.climatepolicyradar.org/document/eu-emission-trading-scheme-eu-ets-directive-2003-87-ec-establishing-a-scheme-for-greenhouse-gas-emission-allowance-trading-within-the-community-and-amending-council-directive-96-61-ec_2be7?q=EU-ets" target="_self"> <ins>Directive 2003/87/EC</ins></a>  (EU-ETS) to bring such MSR rules to the trading scheme.</p>

 Decision (EU) 2015/1814 on the establishment and operation of a market stability reserve for the Union greenhouse gas emission trading scheme, last amended by Directive (EU) 2023/959

Climate Policy Radar

Find climate change laws, policies, targets and other climate policy data and indicators for {text}, alongside information about their legislative process.

{text} climate laws, policies and reports

Use Climate Policy Radar's data science and AI-powered platform to search and explore thousands of climate change laws, policies and legal cases worldwide.

Law and Policy Search

Quickly and easily search through the complete text of thousands of climate change law and policy documents from every country.

Search the Climate Policy Radar database

An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

A long-lived, colourless gas, chiefly emitted from fossil fuel combustion, deforestation and cement production.

Tradable permits are market-based tools that grant permission for specific activities, frequently used to regulate emissions. These permits can be issued within a trading system to manage environmental impacts.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

This sector includes firms and individuals offering specialised expertise in fields such as law, accounting, consulting, science and engineering.

The activities of industries that transforms raw materials into finished goods through industrial processes.

Decision (EU) 2015/1814 - market stability reserve for the Union greenhouse gas emission trading scheme

Policy instrument

Greenhouse gas

Economic sector

Finance