A significant portion of the certificates released by the coal phase-out has already been automatically removed from the market by the so-called Market Stability Reserve (MSR). The MSR controls the auction volumes in the European Emissions Trading System. To ensure that the remaining share is also effectively withdrawn, Germany is supplementing this mechanism with a national cancellation. With the publication of the total number of certificates currently in circulation in the European Emissions Trading System – an indicator for market surpluses in emissions trading – by the European Commission at the end of May 2025, the central basis for determining the national cancellation volume of 514,000 certificates has now been established. The cancellation will take place from September until the end of the year and will be implemented by reducing the regular German auction volumes.
The coal phase-out will lead to further reductions in climate-damaging emissions in the coming years. These will also be regularly accompanied by national cancellations in accordance with legal requirements, unless the cancellation has already been carried out by the MSR. The aim of this measure is to prevent the so-called 'waterbed effect': Without additional cancellation, the freed-up certificates could be used to emit more CO2 elsewhere in the European Union and other countries participating in the trading system (Iceland, Norway, Liechtenstein). The emission reductions associated with the coal phase-out could therefore not be fully achieved. The cancellation thus ensures that the climate protection effect of the coal phase-out is sustainably secured via emissions trading.
Next steps: The provisional German auction volume for the entire year 2025 amounts to 96,764,500 certificates. It is expected that in July, the European Energy Exchange (EEX), as the German auction platform acting on behalf of the German Emissions Trading Authority (DEHSt) at the German Environment Agency, will publish the adjusted auction calendar for the period from September to December. In addition to the regular auction volume reductions by the MSR, the national cancellation volume will also be deducted from the provisional German auction volumes.
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