The European Commission announced on Wednesday its annual estimate of the Total Number of Allowances in Circulation (TNAC) for 2024, a key indicator for determining the volume of EU Emissions Trading System (EU ETS) allowances to be placed in the Market Stability Reserve (MSR).

The TNAC for 2024 stands at 1.148 billion allowances, slightly above the 1.111 billion reported for 2023. As stipulated under the MSR Decision, when the TNAC exceeds 1.096 billion, 24% of the surplus is withdrawn from auctioning to help stabilize the market. This will lead to a reduction of 275.5 million allowances from auction volumes between September 2025 and August 2026.

This marks the largest annual cut in EU ETS supply since 2021, exceeding the 266.8 million allowances withdrawn for the year 2023 and 272.3 million allowances withdrawn for the year 2022 . 

Additionally, under current rules, any MSR-held allowances above a 400 million threshold as of January 1 are invalidated. As a result, approximately 270.5 million allowances were cancelled at the start of 2025.

The European Commission stated that updated auction calendars reflecting the reduction will be published around July 2025. The next TNAC communication, covering figures for 2025, is scheduled for release on 1 June 2026.