The European Commision released on Saturday its annual communication estimating  the Total Number of Allowances in Circulation (TNAC) for 2023. The indicator is the basis for the calculation of the number of EUAs that will be placed in the Market Stability Reserve (MSR) from September 2024 to August 2025.

According to the European Commision, last year, the market surplus amounted to 1,11 billion allowances, slightly lower than 1,13 billion allowances in the previous year. In line with the MSR Decision, when TNAC exceeds 1,096 million allowances, 24% of the total allowances would be withdrawn from the market by reducing the volume of allowances auctioned by the Member States.

Source: The European Commission, chart by EMBA Power

Consequently, a total of 266,8 million allowances would be placed in the MSR from September 2024 and August 2025. Last year, based on TNAC estimated for 2022, around 272 million allowances were placed in the reserve from September 2023 to August 2024. 

Furthermore, the European Commission invalidated around 382 million allowances at the start of this year while “27 million allowances were set aside for the Innovation Fund, in line with the REPowerEU Regulation”, as stated by the executive. The next communication will be made on 1 June 2025.