Sept. 28 (Bloomberg) -- Germany will be the first European Union country to start selling carbon allowances for the next phase of the region’s emissions trading system in October, under a preliminary calendar agreed by the bloc.
Germany, the EU’s biggest economy, will begin on Oct. 12 weekly auctions of permits for manufacturing plants and utilities on the European Energy Exchange AG, the European Commission, the bloc’s regulatory arm, said today in a statement on its website.
The 27-nation EU is moving toward selling a greater proportion of allowances, now mostly given to companies for free, in the eight-year trading period starting in 2013, or the so-called Phase 3. To smooth the transition and limit price shocks, the EU agreed to auction a total of 120 million Phase 3 permits this year.
Germany, along with the U.K. and Poland, decided to opt out from a common platform to sell carbon. The 24 member states that chose to procure common infrastructure for their auctions decided earlier this year to appoint EEX to conduct the sales.
“These auctions are expected to start by end-October, while the precise start date remains to be confirmed,” the commission said in the statement. “EEX, in its capacity as the common auction platform, intends to conduct auctions of general allowances on Tuesdays and Thursdays.”
The U.K., which appointed the ICE Futures Europe exchange to carry out its carbon auctions, plans to sell Phase 3 permits on Nov. 21 and Dec. 5, according to the commission.
Poland, which hasn’t started a tender for its own auctioning venue yet, will sell allowances on the common platform, the commission said. Norway and Iceland, which participate in the bloc’s emissions cap-and-trade program, also plan to use the EEX, according to the commission.
“For auctioning on EEX, it is a prerequisite that the respective auctioneers are admitted to EEX and recognized by EEX’s clearing house,” it said. “If not ready in time for the first auction, the volumes of allowances for the member states concerned will be added as soon as all conditions are met.”
The EU will also start this year selling a proportion of allowances for airlines, which became part of the ETS this year.
Under the preliminary calendar, Germany plans auctions of aviation allowances on Oct. 17 and Nov. 14 and the U.K. will sell permits for airlines on Nov. 26 and Dec. 10. Countries using the EEX as their common platform will sell aviation allowances “mostly on Wednesdays and some on Mondays,” according to the commission.
“The final auction calendars for 2012 remain to be determined formally,” it said. “ICE can do so only after the approval procedure for the U.K. platform has been completed. This is expected for early November.”
From 2013, EEX in its capacity as the common platform plans to continue weekly auctions of permits for manufacturers and utilities, known as general allowances, on Tuesdays and Thursdays and will hold weekly sales for Germany once a week on Friday, the commission said.
ICE intends to auction general allowances for the U.K. every two weeks, on Wednesday mornings, according to the preliminary calendar.
Both ICE and EEX would conduct sales of aviation permits “on certain other Wednesday mornings,” the commission said.
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