The EU Commission has published last week the delegated regulation supplementing the EU ETS auctioning rules “following the revision of the EU ETS Directive in the context of the Fit for 55 and REPowerEU.” The document will enter into force if the Council and the European Parliament do not raise any objections within two months.

Between January – August 2024, a total of 244,42 million EUAs will be auctioned on behalf of the member states. Another 8,5 million EUAAs will be sold in dedicated aviation auctions over the same period.

The quantity of allowances auctioned between September-December 2024 will be published next July, following the publication of the total number of allowances in circulation (TNAC) for 2023. Each May, the executive publishes the TNAC for the previous year.  Based on the volume, the Commission will determine the number of allowances withdrawn by the Market Stability Reserve.

Among others, the new document clarifies the number of additional allowances that will be auctioned in 2024 in the context of the REPowerEU with the aim to generate revenues worth €20 billion until 31 August 2026.  

According to the executive, around 86,68 million allowances will be auctioned between January – December for the purposes of the RePowerEU initiative. From that total, 52 mil allowances are reallocated from the Innovation Fund and 34,67 mil allowances will be auctioned in advance on behalf of the Member States.

Adding roughly 87 million allowances to the annual supply in 2024 alone could negatively impact the carbon prices while others could argue that market players have already factored in the additional amount.