Rebasing the Cap and strengthening the Market Stability Reserve in the EU ETS until 2030
The EU Commission has proposed to reduce emissions in the European Emissions Trading Scheme (EU ETS) by 61 % up to 2030. Apart from the cap, the market stability reserve (MSR) regulates supply and scarcity on the carbon market. This report looks at different options to rebase the cap and to adjust the MSR parameters. It analyses the effects on total allowance supply and on the total number of allowances in circulation (TNAC). These variables can be used as proxy indicators for the overall effective emissions limit – and thus climate effectiveness – as well as the market stability of the EU ETS.