(EU) 2018/410 amends Directive 2003/87/EC and Decision (EU) 2015/1814.
The directive reforms the EU ETS during Phase 4 (2021–2030) and offers an opportunity to increase the effectiveness of this mechanism by:
- Increasing the steepness of the EU ETS emissions cap decrease: instead of 1.74% in the current phase the cap should decrease by 2.2% after 2020.
- Decreasing the oversupply of allowances by transferring 12% of the allowances in circulation to the Market Stability Reserve (MSR) as long as their amount exceeds 833 million. This share will be doubled in the years 2019–2023. Should the number of allowances fall below 400, an additional 100 million allowances will be released from the MSR. This number will also double in the years 2019–2023.
- Cancelling all allowances in the MSR exceeding the number of allowances auctioned during the previous year.
(source: Climate Action Tracker, January 2019)