The European Commision announced last week the volumes of carbon allowances that would be auctioned in order to finance the RePowerEU objectives. According to the EU executive, around 86,7 million allowances are planned to be sold in 2025 with further 58 million allowances in 2026.

The decision came as a surprise to market participants considering the current level of carbon prices. Trading data revealed that this year’s closing price of EU ETS allowances at auctions averaged at around €64,50 while the Commission assumed an average price target of €75.

However, the EU executive announced that “there is no plan to adjust the REPowerEU volumes planned for the period until September 2025,” adding that a decision regarding a possible adjustment for the period September 2025 to August 2026 “will depend on the price evolution and will be communicated in July 2025.”

According to consultancy firm Vyet quoted by Montel News, “the commission’s announcement can be considered bullish from a market sentiment perspective”. Vyet also predicted that the average price for 2025 should be at around €95. 

From the €20 billion worth of allowances that are used to finance the REPowerEU packages, €8 billion would be obtained from front loading allowances which would otherwise be auctioned by Member States in 2027-2030. The exact amount of allowances will depend on the price evolution until the end of 2026.