Brussels, 14/07/2011 (Agence Europe) - EU member states have agreed to auction 120 million emission allowances for phase 3 of the Emissions Trading System (ETS) in 2012, the year before phase 3 starts. On Wednesday 13 July, member state representatives meeting within the EU committee on climate change approved the Commission's proposal along these lines, which takes the form of an amendment to the regulation relating to the trading by auction of greenhouse gas emissions under the ETS. The text of the amendment will now be put to the European Parliament and may be formally adopted by the European Commission in three months' time, if no objections are raised between now and then.
The holding of these so-called “early auctions” before phase 3 of the ETS starts is foreseen in the revised directive on the ETS adopted in 2009 (Directive 2009/29/EC). It is seen to be appropriate given 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 committee of 27 EU experts also provides for a number of other technical changes to the auctioning regulation. Thus, if the amendment is adopted as it is, early auctions will be in the form of spot contracts (i.e. the 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. Two joint procurement agreements set out how the 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 Commission trusts these agreements will be endorsed by the climate change committee in September. (A.N./transl.jl)