This week, we expect EUAs to consolidate between €65 and €70. The European Parliament last week apparently ruled out sales from the MSR to fund REPower EU, instead advocating front-loading of EUA auctions scheduled for future years. This brings the Parliament position more into line with the Council. This most likely removes a strong source of bearish potential from the market, so it seems more likely we’ll see a test of €70 rather than €65, particularly as coal remains firmly priced in ahead of natural gas. Negotiations between Parliament, Council and Commission still have to be completed however so uncertainty will remain. Meanwhile, the EU’s emergency interventions into power markets have entered into force, which could add more stability and be supportive for EUAs. Risk of recession this winter should limit EUA price gains however – recent trading volumes have been low – people don’t seem particularly interested in buying EUAs at the moment.

  • 12.5 million EUAs are to be auctioned this week, 3.1 million more than last week.
  • REPower EU positions:
    • Commission proposed auctioning approx 250 million EUAs worth €20 billion from the MSR to fund REPower EU = bearish, new supply the market did not anticipate being available.
    • Council seeks to raise €20bn by frontloading innovation fund EUA auctions making up 75% of the 20bn, and before the end of 2026, selling allowances meant for auctions from 2027-30. = no new supply of EUAs comes to market, more bullish than Commission proposal. MSR will withdraw some of this additional volume, meaning relatively more bullish risk in the coming years.
    • Parliament seeks to raise €20bn by end-2025, by auctioning EUAs meant for 2027-30. Like the Council’s position, this will have a relatively more bullish market impact than the Commission proposal. No new EUAs will come to market.
  • Ursula von der Leyen has suggested raising extra money from EUA sales. The use of EUAs from the MSR might not be completely off the table…
  • Fit for 55 Trilogues – starting today 10 October. Not many details are known on negotiations between Parliament, Council and Commission, but the legislative process is aimed at being completed by the end of 2022. More details could emerge over coming weeks. See an overview of each here
  • Technicals: EUAs have been trading for a week around the lower end of the uptrend channel – see chart 1 below. Key resistance levels are €67.41, which was broken on Friday and has proven a support level so far on Monday, and then we see strong resistance at €73.60-80.The key support level to look out for is €64.20. We note that nearing the end of trading on Monday, an evening star technical formation is forming. That could be a bearish signal.

Outlook: neutral, price increase possible


  • Indicative EUA Price: €66.80
  • YTD Average EUA Price: €81.91
  • MTD average EUA Price: €67.75



1 – Dec22 EUA price chart 2 – Front month fuel switching – coal to gas – EUAs must reach this price to make gas more economical to burn for electricity than coal.

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