The European Commission has proposed an amendment to the Market Stability Reserve (MSR), a key mechanism within the EU Emissions Trading System (EU ETS). The change would stop the automatic invalidation of surplus allowances above 400 million, instead retaining them as a buffer to support market stability during periods of supply tightness. The proposal for an Amendment to the Market Stability Reserve Decision  is available at this this link.

The proposal preserves the market-based design of the ETS while better equipping it to handle future supply challenges. It now goes to the European Parliament and the Council for adoption through the ordinary legislative procedure.

A comprehensive review of the entire EU ETS is planned for July 2026, which may bring further adjustments. Czech sustainability stakeholders should watch these developments closely, as they will impact carbon pricing and long-term business planning.