Market Stability Reserve under the EU Emissions Trading System to reduce auction volume by 276 million allowances between September 2025 and August 2026

The European Commission has adopted a Communication on the total number of allowances in circulation (TNAC) on the European carbon market. The TNAC is the annual surplus indicator, which determines the functioning of the Market Stability Reserve (MSR) under the EU Emissions Trading System (EU ETS). In 2024, the TNAC stood at 1 148 049 585 allowances.  

The annual publication of the TNAC plays an important role in the functioning of the MSR. It determines whether allowances are withdrawn from the auction volume and placed in the MSR or released from the MSR and auctioned. The MSR Decision (Decision 2015/1814) requires that every year, the TNAC Communication is adopted by 1 June.  

In line with the MSR Decision and based on the adopted TNAC Communication, a total of 275 531 900 allowances will be placed in the MSR over a 12-month period, from 1 September 2025 to 31 August 2026. A decrease in the auction volumes will be reflected in the auction calendars that will be adopted around July 2025.   

Any allowances held in the MSR on 1 January every year above the threshold of 400 million are no longer valid. The adopted Communication indicates that 270 506 086 allowances in the MSR became invalid on 1 January 2025. 

The next TNAC indicator will be published by 1 June 2026. 

Read more

Communication on the total number of allowances in circulation in 2024