Last Friday, the European Commission published the status table on free allocation to industry and heat production for 2024. According to the document, as of 12 December 2024, Member States have distributed nearly 90% of the total amount of allocation for this year, making little progress over the past two weeks.

Around 452 million allowances were granted for free so far this year with 51 million allowances left to be transferred to operators, most likely during 2025. This year, the European Commission allocated 503 million allowances, compared to 526 million allowances for 2023 while in 2022, the number reached 533 million allowances. 

While many countries, including Romania, have already completed (or nearly completed) their annual distribution process, there are several countries left behind. Finland has distributed only 12% out of a total of 12,4 million allowances, followed by Ireland with 15% and France with 47%.

Starting this year, countries were supposed to grant free allocation until June 30, instead of February 28. The process was delayed by four months “to better align with the new compliance cycle for grantig free allocation by the competent authorities and for the surrendering of allowances by the operators,” as stated by the European Commission.

However, because the free allocation process for 2024 was far from being completed ahead of 30 September, which was the compliance deadline for 2023, some market participants were forced to buy extra allowances to cover their compliance needs, a bullish signal for carbon prices. 

According to the Commission, updates on the free allocation process will resume in mid-2025.