EU Member States agree to auction emissions
EU Member States have agreed to the European Commission’s proposal to auction 120m emission allowances for phase 3 of the Emissions Trading System in 2012.
Meeting in the EU Climate Change Committee (CCC), Member States also made substantial progress towards finalising two draft Agreements concerning procurement procedures for the single auction monitor and the common auction platform.
The holding of auctions ahead of the start of phase 3 – so-called ‘early auctions’ – is foreseen in the revised Emissions Trading Directive adopted in 2009. Early auctions are appropriate in view of the widespread commercial practice in the electricity sector of selling power on a forward basis and purchasing the required inputs (including carbon allowances) when they sell their output.
The volume of early auctions is determined by an amendment to the EU ETS Auctioning Regulation. The draft amendment approved by the CCC also provides for a number of other technical changes to the Auctioning Regulation. Early auctions will be in the form of spot contracts (i.e. delivery of allowances no later than 5 days after the auction), also when auctioning on a transitional auction platform. Transitional auction platforms are exempt from some of the provisions of the Auctioning Regulation and therefore the procurement of such a platform facilitates a timely start of the auctions.
The two Joint Procurement Agreements set out how Member States and the Commission will jointly conduct procurement procedures in view of the appointment of the common auction platform that will be used by 24 Member States and the single auction monitor that will monitor the auctions conducted on all auction platforms.
The Joint Procurement Agreements will pave the way for the preparation of the tender specifications for the procurement of the single auction monitor and the common auction platform between the Commission and the Member States.
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