23 April 2012
DECC has announced that it has selected London-based ICE Futures Europe as its preferred supplier to conduct auctions of Phase III and aviation EU ETS allowances on behalf of the UK Government.
Subject to successful completion of the European Commission notification and listing process the auctioning of the UK’s phase III and aviation auctions allowances will start in November.
Greg Barker, Minister of State, said
“This announcement is an important step towards ensuring that we can start auctioning phase III and aviation allowances on time. The bid put forward by ICE Futures Europe will help to ensure value for money and the continued success of UK carbon auctioning into phase III; I look forward to working with ICE Futures Europe over the coming months.”
The contract will be to run the UK’s definitive EU ETS auction platform. It will be awarded for three years, extendable by a further two. It is expected that the contract will be formally awarded shortly.
Notes to Editors
- The European Union Emission Trading System (EU ETS) is at the heart of United Kingdom Government policy to tackle climate change
- The rules governing the system are set out in the EU ETS Directive ; it covers sectors responsible for around half of the UK’s carbon dioxide emissions
- In Phase II (2008-2012) Member States (MS) can auction up to 10% of EU emissions allowances. The UK opted to auction at least 7% of its allowances compared to the EU average of 3%
- In 2008, the EU ETS Directive was revised to make auctioning the main method for allocating emissions allowances in Phase III of the EU ETS (2013-2020). In Phase III, at least 50% of general emissions allowances will be auctioned across the EU. In addition, MS will auction 15% of aviation allowances
- The EU Auctioning Regulation governs the auctioning of carbon allowances for aviation and phase III. It foresees the establishment of a common EU auctioning platform, but Member States have the right to opt out and set up their own national platforms. The UK, Germany and Poland have exercised this right
- There is also flexibility for MS to set up either a temporary “transitional” auction platform or a “definitive” platform for three years, renewable for no more than a further two years. The UK has opted to procure a definitive platform
- The UK ran an EU-wide open procurement process in line with EU procurement rules. The procurement launched on 22 December with a 17 February deadline for submission of tenders
- In accordance with Article 30 of the Auctioning Regulation the commencement of the contract is subject to the European Commission notification and listing process set out in that Regulation. This process is expected to take several months; the UK expects auctioning to start in November 2012 at the latest
- ICE Futures Europe is an FSA regulated Regulated Investment Exchange and Recognised Auction Platform, therefore meeting the requirements of the Auctioning Regulation
- Directive 2003/87/EC as revised and amended by Directive 2008/101/EC of the European Parliament and of the Council of 19 November 2008 which amended Directive 2003/87/EC so as to include aviation activities in the scheme for greenhouse gas emission allowances and Directive 2009/29/EC of the European Parliament and of the Council of 23 April 2009 which amended Directive 2003/87/EC so as to improve and extend the greenhouse gas emission allowance trading scheme;
- Commission Regulation (EU) 1031/2010 of 12 November 2010 on the timing, administration and other aspects of auctioning of greenhouse gas emissions allowances pursuant to Directive 2003/87/EC of the European Parliament and of the Council establishing a scheme for greenhouse gas emissions allowances trading within the Community, as amended by Commission Regulation (EU) No. 1210/2011 of 23 November 2011 which sets out the regulatory framework for the auctioning of allowances covered by Chapter II (aviation) and Chapter III (stationary installations) of that Directive;