Skip to main content

EU Emissions Trading Scheme

Volume 453: debated on Monday 27 November 2006

To ask the Secretary of State for Environment, Food and Rural Affairs what his policy is on the auctioning of carbon emission permits under Phase III of the EU Emissions Trading Scheme; and if he will make a statement. (103241)

The European Commission published, on 13 November 2006, a communication setting out the agenda and process for its review of the EU Emissions Trading Scheme. We welcome the Commission's statement, which appears to cover all the key issues, including those the Government set out in our Vision for Emissions Trading published on 30 October.

The Commission has stated that the review will explore the allowance allocation methodology for Phase III of the scheme, including the level and design of auctioning across the EU.

The UK's aspiration is to move towards full auctioning in the future. This is the fairest method of allocation and ensures that the industry takes account of the full cost of carbon in its business decisions. We intend to learn from the experience of earlier phases and are actively working with other member states in the hope that we can harmonise the proportions of allowances to be auctioned as well as harmonising the rules governing auctioning. We are also keen that auctions are open to participants from all member states.