DEPARTMENT FOR
ENVIRONMENT, FOOD AND RURAL AFFAIRS News Release (News Release ref
:274/08) issued by The Government News Network on 15 August 2008
Organisations can
now apply to become Primary Participants in the UK's auctions
for Phase II of the EU Emissions Trading Scheme. Primary
Participants can bid directly for allowances and will act as
intermediaries in the competitive element of the auctions,
collecting and submitting bids on behalf of indirect bidders who
wish to take part in the auction.
Any organisation with an EU ETS registry account can apply to
become a Primary Participant, providing their organisation can
fulfil the eligibility criteria. Anyone who holds an EU ETS
registry account can then bid for carbon allowances in an auction
through the Primary Participants.
This application process follows the Community Emissions Trading
Scheme (Allocation of Allowances) Scheme auctioning framework,
published on 29 July which sets out the terms governing the
appointment of Primary Participants and eligibility criteria for
the role.
Details of how to apply to become a Primary Participant are on
the Defra website at: http://www.defra.gov.uk/environment/climatechange/trading/eu/operators/primaryParticipants.htm
A full copy of the Scheme is available at: http://www.hm-treasury.gov.uk/media/4/E/euetsscheme290708.pdf
Notes to editors
1. The EU Emissions Trading System (EU ETS) aims to reduce
emissions of carbon dioxide at least cost to industry.
Participants are allocated emissions allowances that they can
trade to help them meet their emissions reductions targets.
2. The System works on a "cap and trade" basis. Member
States' governments are required to set an emissions cap for
all installations covered by the scheme. Each installation will
then be allocated allowances for the particular commitment period
in question. The number of allowances allocated to each
installation for any given period is specified in a document
called the National Allocation Plan (NAP). Anyone who is not
covered by the System will be able to open an account on the
Registry and buy and sell allowances.
3. If an installation fails to surrender sufficient allowances to
cover its annual emissions, it will face financial penalties
(currently set at E100 per tonne), and also the requirement to
surrender sufficient allowances the following year.
4. The UK NAP for the second trading period (2008-2012) sets
aside 7 per cent of the allowance cap for auctioning, amounting to
approximately 85 million allowances over the phase. HMT has
appointed Defra as the person conducting the auction. Defra has
appointed the DMO to act as its agent.
5. The auctions are open to anyone who holds an account on the
Registry. The auctions will comprise two bidding stages - i)
non-competitive and ii) competitive. The first auctions will
involve competitive bidding only. The Government aims to
implement the non-competitive bidding facility in time for the
first compliance period of Phase II.
6. Organisations can apply to Defra to become Primary
Participants and will be assessed against the eligibility criteria
set out in the Scheme. These include having an office in an EEA
state, having the ability to meet financial commitments supported
by suitable credit ratings, the ability to effectively participate
in an auction on behalf of others, and systems to prevent the
disclosure of confidential information.
7. Once appointed, Primary Participants must abide by the
"Terms" set out in the Scheme, which aim to ensure that
UK auctions are open to all and that Primary Participants cannot
refuse to place bids on behalf of an indirect bidder without good reason.
Public enquiries 08459 335577;
Press notices are available on our website http://www.defra.gov.uk
Defra's aim is sustainable development
End
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