The European carbon market continued to strengthen on Monday, with EUA Dec-26 prices settling at €81.57, up €0.99 from the previous session. Prices accelerated higher in late trading, reaching their highest closing level since February 10.

The market received mixed signals during the session. On the bearish side, news emerged that the long-awaited EU–UK summit would be postponed following the British Prime Minister’s announcement that he intends to resign.

The meeting, originally scheduled for July 22, had been widely expected to conclude months of negotiations on several issues, including the potential linking of the EU and UK Emissions Trading Systems (ETSs). The development weighed heavily on the UK carbon market, with UKA Dec-26 futures falling 2.63%, significantly underperforming their European counterparts.

However, the European carbon market reacted positively to the European Commission’s announcement that the €8 billion revenue target for the Member State Recovery and Resilience Facility (MS-RRF) under REPowerEU had been officially achieved.

The milestone was reached following the auction of 111.45 million EUAs, marking the completion of the programme’s fundraising objective and removing a source of additional supply that had weighed on the market in recent years.

“Since the beginning of the year, each auction by the common auction platform included 381 000 allowances allocated to MS-RFF. From 23 June until 31 August 2026, the auction volume on the common auction platform will therefore be adjusted by that amount, from 3 198 500 to 2 817 500 allowances,” explained the Commission.

Following the announcement, the European Energy Exchange (EEX) published an updated 2026 EUA auction calendar, with the revised auction volumes taking effect immediately. However, EEX noted that further changes are likely later this year to reflect the regular Market Stability Reserve (MSR) adjustments, as well as the forthcoming end of auctions related to the Innovation Fund Recovery and Resilience Facility (InnoFund RRF).

The €20 billion REPowerEU facility accelerates EU carbon auctions through two mechanisms: the MS-RRF, which raises 40% (€8 billion) by bringing forward the sale of national allowances originally scheduled for auction between 2027 and 2030, and the IF-RRF, which raises 60% (€12 billion) by redirecting allowances from the EU’s central Innovation Fund. According to the Commission, the latter “is expected to reach its revenue target by mid-July”.

Looking ahead, the prospect of further auction volume reductions linked to upcoming MSR adjustments and the completion of the InnoFund RRF is expected to provide additional support for EUA prices in the near term.