The European Commission today concluded the review initiated in mid-April of the auction time profile of the EU Emissions Trading System (ETS) and proposed a Decision to clarify the provisions of the EU ETS Directive on the timing of auctions of emission allowances.
Climate Action Commissioner Connie Hedegaard said:
"The EU ETS has a growing surplus of allowances built up over the last few years. It is not wise to deliberately continue to flood a market that is already oversupplied. This is why the Commission today has paved the way for changing the timing of when allowances are auctioned. This short-term measure will improve the functioning of the market. If the political will is there, all the necessary decisions can be taken before the next auctioning phase starts at the beginning of 2013. Now it is up to the European Parliament and Member States to deliver. After the summer recess, the Commission will also finalise the options for long-term structural measures.''
The auction time profile concerns the distribution of auction volumes over the eight years of the EU ETS third trading period from 2013 to 2020. Macroeconomic developments in recent years give reason for amending the current time profile by postponing or 'back-loading' some auction volume from 2013-2015 towards the end of phase 3.
To get this work underway and provide the market with the necessary stability for such a future change of the time profile, the Commission today proposed a minor amendment to the ETS Directive. The proposed Decision aims to clarify that the timing of auctions within a trading period may be changed by amending the Commission Regulation on auctioning in order to ensure the orderly functioning of the carbon market. The Decision requires approval by the European Parliament and Council.
To gather early views from Member States, including on the amount of auctioned allowances which should be back-loaded, the Commission is also transmitting a draft for a future amendment of the Auctioning Regulation to the EU Climate Change Committee. To allow also for an active engagement of other stakeholders, they can express their views through this consultation page.
Further information, including on the impact of back-loading 400-1200 million allowances, is available in a Commission Staff Working Document also published today.
Later this year the Commission will present a first report on the functioning of the European carbon market. This offers an opportunity to launch a thorough debate on what structural measures might be needed to address the challenges in the EU ETS.