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REPORT (COM(2025)0738 – C100320/2025 – 2025/0380(COD))

On the proposal for a decision of the European Parliament and of the Council amending Decision (EU) 2015/1814 as regards the market stability reserve for the buildings, road transport and additional sectors

A-10-2026-0098

Committee on the Environment, Climate and Food Safety · Rapporteur: Danuše Nerudová

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Parliament's amended version of the proposed decision amends the market stability reserve for buildings, road transport and additional sectors (ETS2). It extends the validity of allowances in the reserve, strengthens the price stability mechanism, and requires impact assessments. The amendments also stress the need for complementary decarbonisation measures, use of auction revenues for social purposes, and consideration of further social safeguards, including possible derogations and a stronger price cap.

Committee position. The Committee on the Environment, Climate and Food Safety proposes to amend the Commission proposal to extend the validity of allowances, shorten the release period, and require impact assessments, among other changes.

Key points

  1. Allowances in the reserve that are not released remain valid until 31 December 2033, and partially until 31 December 2035; from 1 January 2034, 50% of unreleased allowances become invalid, and the rest from 1 January 2036.
  2. The Commission must, within four years of ETS2 operation, assess the impact of remaining allowances in the reserve, including distributional effects, and consider partial or full invalidation, possibly with a legislative proposal.
  3. Releases from the reserve must start within 30 days after conditions are met, instead of two months, to strengthen price stability.
  4. Member States should use revenues from auctioning allowances released from the reserve to complement their Social Climate Plans.
  5. The Commission should consider options such as strengthening and prolonging the EUR 45 price mechanism beyond 2029, adapting the reserve, allowing temporary derogations for residential buildings, and using revenues for direct support like climate dividends.
  6. The Commission should conduct an impact assessment of ETS2, including social and distributional impacts, and evaluate support for vulnerable households from the Social Climate Fund and Frontloading Facility.
  7. The Commission should consider prolonging the excessive price increase mechanism and other measures to ensure timely financial support to households.

Who is affected

  • Member States: must use auction revenues for social purposes and may face new reporting or assessment requirements.
  • Households, especially vulnerable ones: may receive support from Social Climate Plans and other measures.
  • The Commission: must conduct impact assessments and consider additional measures.

Figures and deadlines

  • 31 December 2033 and 31 December 2035: validity dates for allowances in the reserve.
  • 1 January 2034 and 1 January 2036: dates when 50% and remaining allowances become invalid.
  • 30 days: period within which releases must start.
  • EUR 45: price cap set in 2026 prices, to be considered for strengthening.

Legal basis: Article 192(1) of the Treaty on the Functioning of the European Union