In December 2022, the European Parliament and the Council reached an agreement on financing additional actions under REPowerEU. Of the additional EUR 20 billion in grants, EUR 8 billion will be financed through anticipating the Member States’ auctioning of emission allowances and EUR 12 billion from the resources of the Innovation Fund. These allowances shall, in principle, be auctioned in equal volumes by August 2026. The Innovation Fund will be partly replenished through the auctioning of 27 million allowances from the Market Stability Reserve.
The amendment of the EU Emissions Trading System Directive (Directive 2003/87/EC) related to RePowerEU entered into force on 1 March 2023. To ensure a swift auctioning of the allowances, the Commission has already started work on implementing the necessary changes to the auction process. This includes relevant changes to the contract for the common auction platform in consultation with Member States and the revision of the auction tables through a corresponding Commission Decision.
The Commission expects this process to be completed by the summer. The auctioning for the purpose of REPowerEU is therefore tentatively envisaged to start in July 2023.
In 2023, the quantity of allowances that can be auctioned for REPowerEU is limited by the rules set out in Article 10e of the ETS Directive and in the Auctioning Regulation, as well as by the financing needs of the Innovation Fund. The Auctioning Regulation currently provides for 40 million allowances to be auctioned for the Innovation Fund in 2023. Auctioning of additional Innovation Fund volume will not be possible until the Auctioning Regulation is amended. From what would otherwise be auctioned by Member States in 2027-2030, up to 16.5 million of additional allowances are estimated to be auctioned (frontloaded) in 2023.
Further information, including on the revised auction volumes and the corresponding auction calendars will be published well in advance of the start of the auctions. The amendment of the Auctioning Regulation with additional elements necessary for REPowerEU, including for frontloading the Innovation Fund, will follow.
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