European Union lawmakers & member states have agreed to keep a rule that permanently cancels surplus carbon permits. The deal, reached on October 20, raises the number of permits the Market Stability Reserve can hold from 400 million to 700 million before cancellation begins. The European Commission had wanted to suspend cancellation entirely. Since 2023, more than 3 billion permits have been destroyed under the rule. Negotiators say the larger reserve will steady carbon prices while still preventing a new glut. Both institutions must formally approve the agreement.