EU Emissions Trading System: European Commission approves the UK?s national auction platform

Today the European Commission (EC) Climate Change Committee (CCC) voted to approve the UK’s national auction platform for phase III and aviation auctions under the European Union Emissions Trading System (EU ETS).

Welcoming this important vote, Greg Barker said:

“This announcement is a further step towards ensuring that we can start auctioning phase III and aviation allowances as planned. The endorsement by the EU Climate Change Committee reflects the strength of the UK’s proposal and continued leading role in carbon auctioning.”

The CCC endorsement is the latest step in the UK’s preparations for auctioning phase III and aviation allowances. Under EU rules, the Commission and Member States in the form of the CCC must first approve the platform. This will be followed by a three month scrutiny period by the European Council and Parliament. The UK expects auctioning to start in November 2012, subject to successful completion of this scrutiny process.

Following a decision by the CCC last year, Member States are due to start auctioning some 120m phase III emissions allowances early before the end of this year. The UK’s share of these allowances is 12m. Subject to EU approval, it is expected that these allowances will be auctioned in November and December this year. In addition, the UK is expected to auction approximately 7m aviation allowances by the end of 2012.

Auctions of these allowances will be held separately during the same period.

Further detailed information on the UK’s phase III and aviation auctions, including the proposed auction calendar and how to access the auctions, will follow in due course.

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Notes to editors

• The European Union Emission Trading System (EU ETS) is at the heart of UK Government policy to tackle climate change
• The rules governing the system are set out in the EU ETS Directive; it covers sectors responsible for around half of the UK’s carbon dioxide emissions
• In 2008, the EU ETS Directive was revised to make auctioning the main method for allocating emissions allowances in Phase III of the EU ETS (2013-2020). In Phase III, at least 50% of general emissions allowances will be auctioned across the EU. In addition, EU member states will auction 15% of aviation allowances
• Under the rules set out in the EU Auctioning Regulation, Member States have the option to either auction via a common EU platform, or set up their own, national platform. The UK, Germany and Poland have opted to set up national auction platforms.
• In April DECC announced that ICE Futures Europe was its preferred supplier for the contract to conduct auctions of phase III and aviation EU ETS. This followed an EU-wide competitive tender process that launched in December 2011.
• Before auctions can begin on the UK platform, the platform must first be approved by the Climate Change Committee and then be subject to a 3 month scrutiny period by the European Parliament and Council. These requirements are set out in the EU Auctioning Regulation.
• Both Germany and the European Commission (auctioning on behalf of 24 Member States) have announced their intention to start auctioning after the summer.

Further information can be found on:

• DECC's EU ETS Phase III web page.
• The EU News web pages

Source: http://www.decc.gov.uk/en/content/cms/news/pn12_081/pn12_081.aspx

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