This Publication is an extract from the Coordination of EU Policies on Energy and CO2 (COPEC) report, produced jointly by I4CE and Enerdata, and in collaboration with IFPen. The report provides new, factual, independent and quantified analysis on EU ETS operationality by 2030, to examine the necessary conditions to improve its environmental and economic effectiveness. COPEC Chapter 2 on the EU ETS and the Market Stability Reserve; - Introduces the design of the Market Stability Reserve proposal adopted on 7th July 2015 to be implemented in the EU ETS from 2019 onwards - Provides an analysis of the consequences of introducing the MSR and its potential impacts on the EU ETS supply-demand balance, with specific reference to the level of EUA surplus expected in 2030 - Uses POLES modelling results to demonstrate the potential impacts of the MSR on the EUA price, investment and effort sharing among EU ETS sectors leading to 2030 - Provides an overview of three other emissions trading schemes in the world which have implemented provisions to help stabilize the price of carbon in their programs