Carbon: What To Expect in July 15th ETS Review

Research evidence excerpt

Carbon: What To Expect in July 15th ETS Review

Idea

June 10, 2026 06:49 PM GMT

Morgan Stanley & Co. International plc+MCarbon | Europe Robert Pulleyn

Equity Analyst and Commodity Strategist

What To Expect in July 15th ETS Robert.Pulleyn@morganstanley.comCharlotte Firkins +44 20 7425-4388

Commodities Strategist

Charlotte.Firkins@morganstanley.com +44 20 7425-3866

Review Rachel Fletcher, Ph.D.

Equity Strategist

Rachel.Fletcher@morganstanley.com +44 20 7677-4089

We see the framework for the July 15th ETS review as clearer

Morgan Stanley Europe S.E., Paris Branch+

following the June 10th College of Commissioners meeting. With Arthur Sitbon, CFA

no major surprises to the agenda or to consistency in key EquityArthur.Sitbon@morganstanley.comAnalyst +33 1 42 90 71-03

dynamics to address, EUAs are likely to react positively, and the

Morgan Stanley & Co. International plc+

review may represent a positive cleansing catalyst. Sarah E Lester, CFA

Equity Analyst

Sarah.Lester@morganstanley.com +44 20 7425-0551

Key Takeaways Marina Fuentes Juan

We expect a positive EUA price move following the prep meeting & position Research Associate

Marina.Fuentes.Juan@morganstanley.com +44 20 7425-2268

positive into the July 15th ETS review.

Utilities

Commissioners meeting reaffirmed focus on Phase V 2031-40 & the intent to Europe

defend ETS against pressure to dilute the scheme. Industry View Attractive

Key item for EUA prices is the auction schedule of the €30bn/400mt 'Investment

Exhibit 1 : MS EUA Price Deck

Booster' fund, which is critical for supply/demand balances. Eur/t Base Case

Year Base Case Prev Change Fwd Curve Upside Bear Bull

We expect EUA 2026 prices to be range bound between €60 & €90/t, balanced 2026 80 75 7% 77 4% 50 90

2027 76 73 5% 79 -4% 50 92