European Union countries agreed to stop cancelling excess CO2 permits in the bloc’s emissions trading system (ETS), retaining them in a market stability reserve (MSR) that can act as a supply buffer during price spikes. The plan, first proposed by the European Commission in April, forms part of the EU response to a surge in fuel prices triggered by the Iran conflict. Governments including Poland and Italy had sought measures to limit the ETS’s contribution to electricity costs, although the system is not the main cause of Europe’s rising energy prices. Under the agreement, no spare permits will be cancelled until 2030. From 2031, permits above 800 million in the MSR will be cancelled, with that threshold decreasing annually. EU countries must negotiate the final rules with the European Parliament before they take effect.