The European Commission has revealed a new wide-ranging public consultation on the EU Emissions Trading System (EU ETS) and its Market Stability Reserve (MSR). It hopes to get feedback before planned reviews in 2026
This is all part of the EU’s efforts to refine climate policy tools to ensure they continue to support the bloc’s transition to climate neutrality by 2050.
Climate Neutrality by 2050
Open for 12 weeks, the consultation asks stakeholders to share their views through the EU’s Have Your Say Portal by 8 July 2025.
It is part of the Commission’s wider approach to transparent policymaking and is grounded in the “evaluate first” principle. This principle ensures that major policy initiatives are thoroughly assessed before any proposed revisions.
The EU ETS is one of the focus points of the EU’s climate strategy, using carbon pricing to incentivise emissions reductions. The system covers a variety of sectors, including energy-intensive industries, power generation, and more recently, aviation and maritime transport.
As part of the 2023 revision under the ‘Fit for 55’ legislative package, the ETS was expanded, and its environmental targets were strengthened to work with the EU’s 2030 and 2050 climate goals.
The current consultation looks to input on implementing and functioning the revised ETS Directive, especially since the last significant changes by Directive (EU) 2018/410.
These changes focused on strengthening the system’s effectiveness and resilience in the face of fluctuating carbon prices and shifting economic conditions.
The Commission is also evaluating the MSR, which has been operational since 2019. The MSR is designed to improve the stability of the carbon market by adjusting the supply of allowances in response to market imbalances. The consultation will help assess whether the MSR meets its objectives and whether any adjustments are needed to enhance its performance.
Focus areas: Aviation, Maritime, and stationary installations
Specific aspects of the ETS are also under review. These include its application to aviation, maritime transport, and stationary installations. The goal is to ensure that these sectors contribute fairly and effectively to the EU’s climate objectives, especially in the bloc’s ambition to reach net-zero emissions by 2050.
At the same time, the Commission has also launched separate consultations on the Innovation Fund and the Modernisation Fund. These two complementary instruments support low-carbon technologies and help Member States with lower incomes to modernise their energy systems.
By inviting a broad range of stakeholders, from industry representatives to civil society organisations and individual citizens, the Commission hopes to ensure that diverse perspectives and practical insights inform the forthcoming reviews of the ETS and MSR.
This public feedback will inform the formal evaluation process and any future legislative proposals to refine these key climate instruments. The input received will be crucial in shaping a more effective and equitable carbon market across the EU.
With the 2026 review on the horizon, this consultation marks an important step in adapting the EU’s climate policy framework to meet the evolving challenges of the energy transition and global climate commitments.
