Overview
- Brussels proposed Wednesday to stop deleting excess emissions allowances and to store them in the Market Stability Reserve so the EU can release permits later if carbon prices surge.
- The EU carbon market makes companies hold tradable permits for each tonne of CO2, and its reserve has until now deleted holdings above 400 million to keep supply tight and prices from slumping.
- The plan still needs approval from the European Parliament and all 27 member states, with a wider ETS review due in July that will revisit benchmarks and free allocations for industry.
- Industry groups, including Germany’s chemical lobby and firms like BASF and Evonik, welcomed the proposal, while Green MEP Michael Bloss warned it could depress prices for years and raise emissions by up to one billion tonnes.
- Supporters say a larger buffer could prevent future price spikes after recent energy shocks linked to the Iran war, as critics press for caution and researchers float integrating CO2 removals like BECCS and DACCS into the market with noted risks.