Auctioning of emission allowances
Auctioning has been the principal method of allocating emission allowances since 2013. By default, just over 50% of the allowances for the trading periods 2013–2020 and 2021—2030 are intended to be auctioned. However, the emission allowances available for auctioning will decrease following the introduction of the market stability reserve launched in early 2019. The objective of the reserve is to improve the system’s resilience and reduce the surplus of emission allowances in the markets.
Most allowances are auctioned on the EU’s common auction platform: 25 EU countries are contracting the platform for the auctioning of their allowances, and the three EEA states covered by the EU emissions trading system (EU ETS) are also going to do so. Germany, Poland and the United Kingdom have decided to opt out of the common platform and appoint their own opt-out platforms.
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 European Energy Exchange (EEX) in Germany has been appointed as the EU’s common auction platform. It holds auctions three times a week. Opt-out auctions are held weekly or biweekly. Auction calendars are confirmed annually, for one calendar year at a time.
All auctions are held online and the interface language of the auction platforms is English. The auction format is a single-round, sealed bid auction. Auction bidders place their bids unaware of other bidders, and the action 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 auctioneer responsible for the auctioning of allowance on behalf of Finland.