The European Commission has adopted a Communication on the total number of allowances in circulation (TNAC) on the European carbon market. The TNAC is the annual surplus indicator, which determines the functioning of the Market Stability Reserve (MSR) under the EU Emissions Trading System (EU ETS). In 2025, the TNAC stood at 1 023 494 202 allowances.
The annual publication of the TNAC plays an important role in the functioning of the MSR. It determines whether allowances are withdrawn from the auction volume and placed in the MSR or released from the MSR and auctioned. The MSR Decision (Decision 2015/1814) requires that every year, the TNAC Communication is adopted by 1 June.
In line with the MSR Decision and based on the adopted TNAC Communication, a total of 190 494 202 allowances will be placed in the MSR over a 12-month period, from 1 September 2026 to 31 August 2027. A decrease in the auction volumes will be reflected in the auction calendars that will be adopted around July 2026.
On 1 January 2026, there were 400 million allowances in the MSR. Allowances held in the MSR above this level are no longer valid.
On April 2026, the Commission has proposed an amendment to the MSR to stop the invalidation mechanism. Until this amendment enters into force, the number of allowances placed into the reserve will continue to be calculated under Article 1(5) of the MSR Decision, with one twelfth added each month, consistent with the reserve’s operation since its foundation.
The next TNAC indicator will be published by 1 June 2027.
