What happened
Germany has told the European Commission that its voluntary cancellation volume under the EU Emissions Trading System for 2024 is zero. The calculation relates to two electricity-generating ETS installations that closed in Germany in 2022 following additional national measures.
The country notified the Commission in May 2026 of the number of allowances for cancellation in the 1 September to 31 December 2026 period. Germany had first signalled its intention to make a voluntary cancellation in a 2024 notification published by the Commission.
Under the applicable calculation method, however, no allowances are to be cancelled for 2024. The Commission attributes that outcome to the Market Stability Reserve, which removed the excess allowances arising from the closures.
Why it matters
The notification means the German process will not create an additional national cancellation of allowances connected with these closures for 2024. EU ETS participants assessing allowance supply can therefore distinguish this outcome from a separate cancellation that would have reduced the market volume further.
It also illustrates the interaction between national measures affecting generating capacity and the EU ETS reserve. In this instance, the reserve’s operation meant that a national cancellation was not required.
How the reserve affected the outcome
The Commission said the total number of allowances in circulation, the indicator used for the Market Stability Reserve, was in the reserve’s buffer range in 2025. On that basis, the reserve took in the full excess volume associated with the 2024 effect of the plant closures.
Germany’s preceding cancellation produced a different result. In 2025, allowances were cancelled in relation to 2023 because the 2024 circulation total was above the reserve’s upper threshold. In that case, the reserve had taken in only 24% of the excess allowances.
What to monitor
The notified cancellation window runs from 1 September to 31 December 2026, but the calculated amount for 2024 remains nil. Market participants tracking the effect of closures on EU ETS supply should monitor both national notifications and the Market Stability Reserve indicator, as the reserve’s position can determine whether a separate cancellation is needed.
