Climate Change Special Programme
Auctioning of EUAs2014-04-10
During the third phase of the EU Emission Trading Scheme (EU-ETS) which began on 1st January 2013 and will continue until 2020 auctioning of EU allowances (EUAs) is supposed to become the main form of distribution of EUAs to operators. EU-ETS currently covers over 11 thous. industrial facilities and aircraft operators and 45% of the EU’s greenhouse-gas emissions.
In the first (2005-2007) and second (2008-2012) EU-ETS stages almost all EUAs were distributed to operators for free. Enterprises were able to purchase missing EUAs through auctions if they exceeded their quota as imposed by the legislation.
In the third stage (2013-2020), according to established EU requirements, greenhouse gas emissions from industrial and energy-production facilities must be reduced by 21% as compared to 2005 level. In 2013 EU-ETS participating companies received around 80% of EUAs for free, but this number has been decreasing each year and it is estimated that by 2020 only 30% of EUAs will be free of charge. Any missing permits have to be purchased at auctions. According to EU regulations, by 2027 operators will no longer receive free allowances.
The third phase of EUA auctions began towards the end of 2012, when a joint transitional EUA exchange - European Energy Exchange (EEX) - was selected through a public procurement process. Emission permits started being sold in preliminary auctions to test both the emissions market and stakeholder expectations. Currently 25 member states, including Lithuania, participate in the transitional joint EUA exchange. Germany, Great Britain and Poland have chosen to sell their own allowances through exchanges they have selected themselves.
The sale of EUAs and selection of exchanges is governed by Regulation No. 1031/2010 of the European Commission. This regulation dictates the rules of auctioning, auctioneer selection criteria and so forth.
Resolution No. 409 of the Government of the Republic of Lithuania, dated 6th April 2011, states that the auctioneer functions for EUAs belonging to Lithuania are being delegated to the Ministry of Finance and that all funds received from the sale of EUAs have to be transferred into the Climate Change Special Programme.
Summary of annual Programme's income (in million EUR) from the sale of EUAs in 2011-2015:
EUA auctioningvia joint exchange
Sale of EUAs fromNew Entrant Reserve
* preliminary figure
Each year the Ministry of Environment prepares and submits (to the European Commission) its annual reports on the usage of income from AAU auctioning:
More information on EU third-stage auctions can be found below:
Page updated: 3 Dec 2015