Auctioning of emission allowances

Auctioning is the principal method of allocating emission allowances. As a rule, just over half of emission allowances are intended to be auctioned.  However, the market stability reserve decreases the emission allowances available for auctioning. The objective of the reserve is to improve the system’s resilience and reduce the surplus of emission allowances in the markets.

Auctions are primarily organised on the EU’s common auction platform, which provides a channel for simultaneously auctioning the allowances of 25 EU countries, including Finland. Germany and Poland have decided to opt out of the common platform and appoint their own opt-out platforms.

The European Energy Exchange (EEX) in Germany has been appointed as the EU’s common auction platform. It holds joint auctions three times a week. Auction calendars are confirmed annually for one calendar year at a time.

Operators covered by the EU ETS, investment firms and other actors eligible to apply for admission to auctions under the EU Auctioning Regulation (2010/1031/EU) can access any auction organised.

The auction format is a single-round, sealed bid auction. Auction bidders place their bids unaware of other bidders, and the auction platform determines the clearing price based on the lowest successful bid. All successful bidders will pay the same price, regardless of the price they specified in their bids.

The Energy Authority is the competent authority for auctioning Finland’s emission allowances.

Further information: eleonoora.eilitta(at)gov.fi, valtteri.harmala(at)gov.fi