The UK Government has published the EU ETS auction schedule from May 2012 up to July 2012. The government intends to auction 12 million allowances over the period.
The EU ETS works on a ‘cap and trade’ basis. EU governments are required to set an emissions cap for all installations covered by the system. Each installation will then be allocated allowances for the particular commitment period in question. If a generator fails to provide enough allowances to cover its annual emissions, it will face financial penalty of 100 Euros per tonne.
The UK has successfully held to date twenty four Phase II auctions in EU ETS allowances, selling 99 million EUAs.