Non-paper - Financing REPowerEU: Alternatives to the MSR

Non-paper by the Netherlands on financing REPowerEU while preserving the intregrity of the ETS Market Stability Reserve. The EU ETS is the cornerstone of EU climate policy. Using the MSR to finance budgetary deficits sets an undesired precedent of auctioning allowances that are otherwise cancelled, risking an increase of carbon emissions. Financing REPowerEU subsidies could also be done by frontloading the auctioning of ETS allowances, which has multiple advantages compared to auctioning through the MSR.