When a company or an aircraft operator covered by the EU Emissions Trading System (ETS) needs allowances they can either buy them at auction or from a carbon broker or trader. Some companies, other than electricity generators, receive some free allocation of allowances from the EU Commission.
The auctioning of carbon allowances is the main method for allocating allowances to companies that are regulated by the EU ETS, since 2013. This means that businesses need to acquire an increasing amount of their carbon allowances through the EU ETS auctioning process.
Allowances can also be allocated for free, but this is decreasing in Phase IV of the EU ETS (2021-2030).
The European Energy Exchange (EEX) in Germany currently acts as the common auction platform (CAP) and auctions allowances for 25 EU Member States, including Ireland.
In this role, EEX holds regular auctions of EU general allowances (EUAs) and EU aviation allowances (EUAAs). Useful information on these auctions, the auction calendar and who can participate in these auctions is available on the EEX website.
If you have specific queries on this auction process, contact EEX.
EU law sets out the timing, administration and other aspects of auctioning to ensure this takes place in an open, transparent, harmonised and non-discriminatory manner.
All Member States have appointed an auctioneer, who is responsible for offering the allowances to be auctioned to the auction platform on behalf of that member state. The EPA was appointed as the auctioneer for Ireland under national legislation.
The EU Commission webpages have further information on EU ETS auctioning.