The European Commission proposed an automatic mechanism to remove the 2 billion surplus of ETS allowances which destabilised the supply and demand balance causing prices crash and remain ineffective. The Market Stability Reserve (MSR), if designed correctly, could restore short and long-term confidence to the carbon market.

Key elements of the Commission’s proposal and impact assessment are:

  • A Market Stability Reserve that comes into force in 2021
  • Institutionalising a surplus of ETS allowances between 400 and 833 million tonnes
  • When the surplus is more than 833 million 12% excess allowances enter the MSR
  • When the surplus is less than 400 million, 100 million allowances exit the MSR
  • The 400 and 833 million thresholds will be reviewed in 2026

Reform in the European Parliament

Key documents:

bullet_redstar Ivo Belet leaked report (17 November 2014) bullet_redstar Draft ITRE Opinion 17.10.14 bullet_redstar  5 November hearing agenda  bullet_redstar  MSR hearing slides (Advance copy)  bullet_redstar  ITRE MSR amendments – UNTRANSLATED (28 November 2014)  bullet_redstar draft ITRE compromise amendments without agreement from other shadows (8 December 2014) bullet_redstar UK MSR and competitiveness guidance note (December 2014) bullet_redstarENVI Committee amendments – untranslated (Dec 2014)  bullet_redstar  ENVI Committee amendments – translated (January 2015)  bullet_redstar  ITRE Compromise amendments (14 January 2015)  bullet_redstar EPP internal compromise between Tajani and Belet EPP internal compromise between Tajani and Belet bullet_redstar  Provisional draft of ENVI compromise amendments (12 February, 2015)  bullet_redstar  ENVI Compromise amendments (23 February 2015)  bullet_redstar  ENVI final compromise amendments (24 February 2015)  bullet_redstar ENVI Committee roll call vote ( 24 February, 2015) bullet_redstar  ENVI final negotiating amendments (2 March 2015)

The European Parliament’s Environment, Public Health and Food Safety Committee (ENVI) and the Environment Council are is responsible for improving the Commission’s proposal. The ENVI Committee appointed:

Ivo Belet MEP (EPP) Belgium –  lead legislator (Rapporter)

Mathias Groote MEP (S&D) Germany – Shadow

Bas Eickhout MEP (Greens/EFA), Netherlands – Shadow

Gerban-Jan Gerbrandy MEP (ALDE) Netherlands – Shadow

FIMerja Kyollnen MEP (GUE/NL) Finland – Shadow

Ian Duncan MEP (ECR) United Kingdom – Shadow

Eleonora Evi MEP (EFDD) Italy



Industry, Energy and Research Committee (ITRE) gives an opinion to the ENVI Committee. The opinion givers are:


Antonio Tajani MEP (EPP) Italy

Fedrick Federley MEP (ALDE) Sweden

Theresa Griffin MEP (S&D) UK

Peter Eriksson MEP (Greens/EFA) Sweden

Cornelia Ernst MEP (GUE/NL) Germany

Rolandas Paksas MEP (EFDD) Lithuania

Marek Grobarczyk MEP (ECR) Poland

Reform in the Environment Council

The following countries have submitted official positions outlining their key reform priorities:

bullet_redstarGermany  bullet_redstar UK (October 2014) bullet_redstar  French government’s non-paper (October 2014)  bullet_redstar  Council progress report (5 December 2014)  bullet_redstar  Latvian Presidency proposal (7 January 2015)  bullet_redstar  Joint Ministerial statement on MSR (23 February 2015)  bullet_redstar  Latvian Presidency MSR text (12 February 2015)  bullet_redstar  Council text with EP amendments (5 March, 2015)  bullet_redstar  Latvian Presidency (12 March 2015)  bullet_redstar  Latvian Presidency (20 March, 2015)  bullet_redstar  1st trilogue text (26 March, 2015)  bullet_redstar  Council Working Party text (15 April, 2015)  bullet_redstar   2nd trilogue text (30 April, 2015)  bullet_redstar  Final MSR text adopted after trilogue (5 May, 2015)




5 November, 2014 – Joint ENVI and ITRE hearing. Room JAN 4Q2, Brussels.

10-13 November, 2014 – Debate in the ENVI Committee. Room JAN 4Q2, Brussels.

17 November, 2014 – Consideration of ITRE Committee opinion. Room JAN 4Q2, Brussels and Council Working Party meeting.

24 November, 2014 – Deadline for amendments to the ITRE opinion.

3 December, 2014 – Consideration of Belet’s draft MSR report in ENVI. Room JAN 4Q2, Brussels, and ITRE opinion.

11 December, 2014 – 12pm deadline for amendments to Belets report.

17 December, 2014 – Environment Council. Expected to agree position on MSR reform.

21 January, 2015 – ITRE vote on Opinion. Consideration of amendments in the ENVI committee.

24 February, 2015 – ENVI Committee vote on MSR report.

10 March, 2015 – Council Working Party.

16 March, 2015 – Council Working Party.

25 March, 2015 – Coreper takes Council position.

30 March, 2015 – First negotiation between Council, Parliament and the Commission.

1 April, 2015 – Coreper discusses outcome from first trilog negotiation.

20 April, 2015 – Council working party ‘Tecnical meeting’.

29 April, 2015 – Coreper meeting to agree position prior to second trilog negotiation between Council, Parliament and the Commission.

5 May, 2015 – Second negotiation between Council, Parliament and the Commission.

26 May, 2015 – Possible third negotiation between Council, Parliament and the Commission.

Plenary vote in the Parliament, which approves the negotiated compromise, to take place between 27 May – 31 July 2015.