Brussels, 15/07/2010 (Agence Europe) - A further step has just been taken in implementing the instruments of the Climate and Energy legislative package. On Wednesday 14 July, member states' experts on the Council climate change committee unanimously backed the draft European regulation on auctioning CO2 emissions allowances under the Community Emissions Trading Scheme (ETS).
These new rules will govern the auction of over one billion CO2 quotas per year in the third trading period, from 2013 to 2020, and allowances to be used by aircraft operators from 2012. They will be approved under the comitology procedure. Assuming that neither the Council nor the European Parliament states any objections, the Commission will adopt the regulation following the three-month scrutiny period. Once adopted, the regulation will become immediately applicable.
Opt-out conditions from the single European auction platform caused the longest discussion within the committee. The United Kingdom, Germany, Spain and Poland, which wanted an opt-out, will be given that option, providing they inform the Commission of their intention within three months of the adoption of the regulation. That was the compromise that allowed unanimity to be achieved.
In a press release published on Thursday 15 July, European Climate Action Commissioner Connie Hedegaard welcomed the progress made. “The Commission would have preferred a single platform. But some member states insisted on the possibility to have their own platform. So I am satisfied to see that member states have found a compromise that will provide a basis for a solid common auction platform and that member states can opt out of this common platform provided they meet certain criteria that ensure the proper functioning of auctions and the carbon market,” she said.
The revised ETS directive (European Parliament and Council Directive 2009/29/EC of 23 April 2009, amending Directive 2003/87/EC) states that, from 2013, auctioning of allowances will gradually take over from free allocation of emission quotas, becoming the main method of allocating permits in all the sectors covered by the ETS directive. By 2013, it is forecast that at least half of the quotas will be auctioned. For civil aviation, 15% of permits will be auctioned for the whole trading period.
The draft regulation provides for member states and the Commission jointly creating a common platform to auction emission allowances on behalf of the member states. A common auction platform is thought to be the most cost-efficient approach for member states and bidders. The Commission considers that a common platform best ensures respect of the principles of non-discrimination, transparency and simplicity, provides the best guarantees for full, fair and equitable access to small and medium sized enterprises covered by the EU ETS and small emitters, and best minimises the risk of market abuse.
However, the member states that wish to appoint an auction platform of their own will be able to do so, since the regulation provides for adequate rules as to the functioning of such auction platforms and coordination with the common auction platform.
The draft regulation provides for a simple “single-round, sealed-bid, uniform-price” auction format which is easily accessible for ETS operators and other eligible bidders. It also provides for a predictable auction calendar with annual volumes being determined automatically on the basis of a straightforward rule set out in the regulation. The auction platforms will decide and publish the details of individual auctions for a given calendar year almost a year in advance. The volume of allowances to be auctioned in 2012 will be determined at a later stage.
The Commission says that it will start preparations for the creation of the common auction platform, jointly with the participating member states, without delay. (O.L./transl.rt)