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

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Laws and Policies

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of allowances since 1 January 2008 and serves as a key input for determining whether allowances should be added to or withdrawn from the MSR in order to maintain market stability.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

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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

Any compulsory, unrequited payment to the government levied on corporations or individuals. This can be for environmental reasons, such as introducing a Carbon tax to set a price that emitters must pay for the greenhouse gases they emit.

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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.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

A commitment to balance GHG emissions with removal by a certain point in time, effectively reducing the net emissions to zero

Financial support to help individuals manage the effects of unexpected events, securing their livelihoods and increasing the resilience of people and businesses to the changing climate. It’s especially vital in developing regions where everyday risks, climate-related weather extremes, or crop failures can push people into poverty. Without insurance, people may have to resort to selling assets or cutting consumption to cope with losses.

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.

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Oil is a combustible liquid fossil fuel composed mainly of hydrocarbons, occurring as crude oil and refined into petroleum products such as petrol, diesel and kerosene.

Activities that relate to the production of goods and services from forests.

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

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Dedicated pool of financial resources for climate-related projects.

People whose health, both mental and physical, makes them more vulnerable to the effects of climate change

woman and genders outside of the gender binary

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

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.

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.

Using laws and the legal system more broadly to protect vulnerable entities

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

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

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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.

Climate change can have a range of impacts on technological system. Extreme weather events can cause infrastructure failures like power outages or damage to roads and bridges, as well as the impacts from waste following natural disasters. Human activities also cause technological impacts, such as the risks posed by oil spillage and leaks.

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

Compulsory, required payments to the government that are levied more-or-less in proportion to the services provided. Fees and charges range from entrance fees to national parks, charges on land-based sewage discharge.

Actions or measures to adapt freshwater, coastal and marine systems to climate change.

Zoning and spatial planning are both methods for guiding the distribution of people and activities in a space, and are regulatory restriction.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

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

Extreme weather refers to events where a weather variable exceeds (or falls below) a threshold. Meaning it is significantly different from the average or usual weather pattern.

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.

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

Target

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance