*To be updated through the day*

After market close on 28 July, the European Commission, jointly with EEX, released the update to the 2025 auction calendar alongside the auction calendar for 2026.

The routine withholding for the Market Stability Reserve (MSR) is reflected. A total of 275.5 million EUAs will be placed in the reserve between September 2025 and August 2026.

As expected in our analysis from last week, maritime volumes are not included in this update. Instead, the European Commission has confirmed that there will be a new calendar update to reflect the cancelled maritime allowances before the end of 2025. We assume that approximately 54 million EUAs will be cancelled from the 2026 auction calendar as a result of the maritime adjustment.

REPowerEU volumes have not been adjusted for the 2025 auction calendar. However, the period between January 2026 and August 2026 will see an additional 35.28 million EUAs sold to shore up the revenue shortfall in order to reach the EUR 20bn monetary target, bringing the announced REPowerEU volumes auctioned in 2026 from previously 58 million allowances to 93.28 million allowances (+61 percent).

Market impact

Adding a total of 35 million EUAs for the first eight months of 2026 is higher than most expectations. Based on the current revenue shortfall of EUR 8 bn to reach the REPowerEU target of EUR 20 bn and the remaining dedicated auction volumes of 130 million EUAs (36.7 million EUAs until year-end 2025 and 93.3 million allowances Jan-Aug 2026), the stipulated auction price needed to reach the EUR 20bn target is EUR 61.74/t. For reference, in the past six months, only three auctions have cleared below this level, while the actual 6-month average has been EUR 70.44/t.

The additional 35 million EUAs during 2026 essentially act as overflow, ensuring that the target revenue, a target prescribed by law, is certain to be hit without major complications in squeezing in high auction volumes before 31 August 2026. Once the EUR 20bn is achieved, the sale of these allowances ceases overnight. The impact of the upwards-adjusted REPowerEU volume is certainly bearish, but as we are drawing closer to the end of the REPowerEU sales, these volumes reflect a safety-valve scenario for EUA prices rather than an expectation by the Commission on future EUA prices.

UPDATE:

Of this 35 million EUAs, it appears that around 3.5 million more than in 2024 and 2025 will be drawn from 2026 Innovation Fund volumes. These volumes will simply be shifted from existing volumes rather than adding new volumes from future years. Of the 35 million additional EUAs that will be sold for REPowerEU revenue, 31.5 million will be drawn from future years, while 3.5 million amount to a reshuffling of 2026 volumes.