Sandbag is a UK based not-for-profit organisation campaigning for environmentally and economically effective climate policies, with a focus on the EU Emissions Trading System (ETS).
Our campaigns are supported by in-house research that monitors the environmental robustness of the ETS, the distribution of allowances, and how key sectors, installations and companies in the scheme are affected.
Through small changes in carbon markets, both in Europe and across the world, billions of tonnes of carbon dioxide can be prevented from entering the atmosphere; with our analysis and lobbying, we can make sure that’s what happens.
Join us in calling for tighter caps on emissions and/or take direct action to cancel carbon permits now.
Legal caps on emissions are in place across Europe. Use our maps to find out who is capped, how many emissions permits they have been given and where they are sourcing their offsets from. Nearly three quarters of installations now have more permits than they need.
This is why we're campaigning for caps to be tightened and for offsetting reforms.
What's new?
posted by Phil on 25th Jul 2014

Recognising the problems with the EU Emissions Trading Scheme, including a vast surplus of carbon allowances, and a continually low carbon price, the European Commission has proposed a Market Stability Reserve to fix the scheme. Sandbag has responded, in this briefing (PDF). A summary of the problems with the proposal and our recommendations are below.

Areas of concern

There is considerable merit in the principle of introducing a Market Stability Reserve. There are, however, potential issues with some elements of the proposal as it stands. Three design elements are of particular concern:

  • Late implementation: the reserve does not become operational until 2021
  • Sensitive hedging assumptions: the reserve sets fixed supply triggers which risk significantly under or over-adjusting supply if its hedging assumptions are mistaken.
  • Slow response time: the reserve takes two years to react to changes in supply

Our recommendations

Sandbag recommends the following changes to the proposal:

  • Recommendation 1: Start the Market Stability Reserve immediately (Page 5)

The Market Stability Reserve should be agreed and implemented as soon as possible (instead of 2021, as in the Commission proposal) and the 900 million backloaded allowances should not re-enter the market.

  • Recommendation 2: Make supply triggers and adjustments less sensitive to error (Page 7)

a) The supply adjustments made by the MSR should be 33% of the difference between the supply and the nearest supply trigger (not a fixed 100 million allowances, as in the Commission proposal)

b) Making the supply triggers decline predictably over time in line with the Linear Reduction Factor (instead of fixing them at 400 to 833 million allowances, as in the Commission proposal)

  • Recommendation 3: Improve the response-time of the Market Stability Reserve (Page 10)

We recommend that the Market Stability Reserve should alter the auction calendar from the start of July, two months after the compliance data is submitted, instead of eight months later.

Read the full briefing here (PDF), and please contact Head of Policy, Damien Morris ( with your thoughts.

Add comment


(will not be displayed on our website but we might want to contact you):



Previous blog posts

Our Climate is Changing!
Subscribe to the
sandbag monthly newsletter

  • Sandbag ... strikes a balance between underlining the merits of the EU ETS and criticising the weaknesses.
    Connie Hedegaard, European Commissioner for Climate Action, speaking at the launch of Sandbag's "Buckle Up!" report in the European Parliament
  • Sandbag is playing a crucial role in making sure that Europe's cornerstone climate policy actually does its job.
    Caroline Lucas, MP
  • An inspirational idea that promises to make a real and positive difference... and a wonderful opportunity to help sort out the climate mess we've all created.
    Prof. Chris Turney, University of Exeter and author of Ice, Mud and Blood: Lessons from Climates Past
  • It just seems to be a campaign that gets right in there with how big companies work, beating them at their own game, rather than standing by spouting platitudes, wringing hands and doing nothing. Keep up the good work!
    Sandbag supporter
  • Probably the most creative anti-climate change website around.
    Alok Jha, The Guardian (listen to the podcast)
  • I am a graduate student, researching EU foreign policy on climate change. Sandbag has been the only source that has been able to bring a degree of transparency to the ETS.
    sandbag supporter
  • Here at last is a way to really keep carbon out of the atmosphere - by buying pollution credits on the European market and destroying them. I wholeheartedly support this initiative, and the vital linked campaign to get the European carbon cap tightened up.
    Mark Lynas, New Statesman environment correspondent and author of Six Degrees,
  • I consider your offset map to be a massive step forward in transparency in carbon markets, and a wholly positive development.
    sandbag supporter
  • What I like most about Sandbag is that a group of brilliant people are working on what matters rather than just what is visible or easy to engage with.
    sandbag supporter
function hide_all_map_pics() { $('#frontpage_emissionsmap_image').hide(); $('#frontpage_offsetmap_image').hide(); $('#frontpage_jimap_image').hide(); $('#frontpage_fatcatsmap_image').hide(); } $('#frontpage_emissionsmap_link').hover(function() { hide_all_map_pics(); $('#frontpage_emissionsmap_image').show(); }); $('#frontpage_offsetmap_link').hover(function() { hide_all_map_pics(); $('#frontpage_offsetmap_image').show(); }); $('#frontpage_jimap_link').hover(function() { hide_all_map_pics(); $('#frontpage_jimap_image').show(); }); $('#frontpage_fatcatsmap_link').hover(function() { hide_all_map_pics(); $('#frontpage_fatcatsmap_image').show(); }); $('#newsletter_email_field').focusin(function() { if ($('#newsletter_email_field').val() == 'your email here...') { $('#newsletter_email_field').val(''); } }); $('#newsletter_email_field').focusout(function() { if ($('#newsletter_email_field').val() == '') { $('#newsletter_email_field').val('your email here...'); } }); $('#newsletter_form').validate({ rules: { email_field: { email: true } } });
© 2014 Sandbag Climate Campaign CIC
Registered as a Community Interest Company in England & Wales: Company No. 6714443
Registered Address: BWB Secretarial Ltd, 2-6 Cannon Street, London, EC4M 6YH
Trading Address: 28 Leman Street, Aldgate, London, E1 8ER