EPA Opens First EU Auction for Emissions Trading

Date released: Jan 27 2006

The EPA has launched the first EU Auction for Greenhouse Gas Allowances under the Emissions Trading Scheme today. The Auction is open to anyone with a registry account listed on the Community Transaction Log, as operated by the European Commission. The auction provides interested parties with an accessible way to purchase allowances from a Government source. 

The Auction follows from the Government Decision on the first National Allocation Plan for the pilot phase (2005 – 2007).  In this decision, the EPA was directed to auction up to one per cent of total allowances in order to fund the administration of the scheme. A total of 250,000 allowances (or roughly half the amount finally decided upon in the National Allocation Plan) are now available for auction, divided into lots of 500 allowances each.

Simplicity was the guiding principle in establishing the auction design.  The EPA has decided to use a sealed-bid format with a uniform pricing rule.   As of today, pre-qualification codes and auction forms are available by email from the EPA at ETSauction@epa.ie and sealed bids on these forms will be accepted in the EPA’s Dublin offices until 5:00pm local time on 17 February 2006. An undisclosed reserve price will be set, and a deposit of €3,000 will be required with all valid bids.  This will be refunded to unsuccessful bidders or deducted from the settlement price for those who are successful.  For further details on participation in the auction or for information on the auction methodology go to http://www.epa.ie/whatwedo/etu

The EPA plans to hold a further auction towards the end of this year. A number of EU countries are also expected to have allowances for sale (including Denmark, Hungary and Lithuania), while some other countries may decide to auction residual amounts remaining in unused set-asides. Greenhouse Gas Allowances are currently trading within Europe at around €25 each.