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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of allowances since 1 January 2008 and serves as a key input for determining whether allowances should be added to or withdrawn from the MSR in order to maintain market stability.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

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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.

This sector involves the wholesale and retail selling of goods.

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.

Aligning the skills of the workforce with the requirements of the just transition.

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

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

Activities of businesses and institutions that provide financial services and products to individuals and organisations.

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

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

Work that is productive and delivers a fair income, security in the workplace and social protection for all, better prospects for personal development and social integration, freedom for people to express their concerns, organize and participate in the decisions that affect their lives and equality of opportunity.

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

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

Actions to adapt and increase the resilience of rural and urban infrastructure and settlements to climate change.

Slow onset events evolve gradually from incremental changes over many years or from increased frequency or intensity of recurring events. As defined in the Cancun Adaptation Framework (2010), slow onset events include risks and impacts from rising temperatures, desertification, biodiversity loss, land and forest degradation, glacial retreat, ocean acidification, sea level rise, and salinization.

A target to reduce the prevalence of a greenhouse gas over a specific time frame

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

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

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

Conditions that enhance the feasibility of adaptation options. Enabling conditions include finance, technological innovation, strengthening policy instruments, institutional capacity, multi-level governance and changes in human behaviour and lifestyles.

Climate change impacts our society by disrupting the natural, economic and social systems we depend on. Physical hazards and underlying vulnerabilities can lead to increased resource competition for food and water, which can heighten the risk of conflict.

Dedicated pool of financial resources for climate-related projects.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Activities of government agencies and institutions that provide public services, enforce laws and manage public resources.

This sector involves activities to move goods and people, alongside the storage of products.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

This sector involves activities that impart knowledge and skills to individuals, including formal schooling, vocational training and educational support.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Directive (EU) 2018/410

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance