On Monday 15 May, the European Commission published a communication on the annual surplus indicator, or the total number of allowances in circulation (TNAC) in 2022, in the European carbon market.
The total number of allowances for the past year thus amounts to 1,134,794,738. In accordance with Decision 2015/1814 concerning the establishment and operation of a market stability reserve for the Union greenhouse gas emissions trading system (see EUROPE 11392/2) and based on the indicator, a total of 272,350,737 allowances will be placed in the Market Stability Reserve (MSR) for one year, from 1 September 2023 to 31 August 2024.
There’s a good reason for such a move: according to decision 2015/1814, if the TNAC exceeds the 833 million threshold, 24% of it is placed in the MSR, reducing the volume of allowances that Member States auction. In addition, from 2023 onwards, any allowances held in the MSR in excess of the previous year’s auction volume are no longer valid. In this way, 2,515,135,787 MSR allowances became invalid on 1 January 2023.
The next publication of the TNAC indicator, expected on 1 June 2024, will take into account the changes set out in the ‘Fit for 55’ package (see EUROPE 13162/1) as well as the REPowerEU regulation adopted in February 2023 (see EUROPE 13126/16).
To read the communication: https://aeur.eu/f/6xu (Original Version in French by Nithya Paquiry)