Market Stability Reserve 2 Reform Explainer
On 25 June 2025, 16 EU member states released a non-paper to request that the European Commission assess various options for a reform of ETS2, the new emissions trading system for buildings and road transport beginning in 2027.
The involved member states are concerned about the risk of high or volatile ETS2 prices and also express uncertainty about the initial price level. While the risk of high prices can be managed without reform of the ETS2, the proposed revisions include proposals that would weaken the ETS2 and lower climate ambition through reform of the market stability reserve (MSR2).
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