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29 July 2008

The Community Emissions Trading Scheme (Allocation of Allowances for Payment) Regulations and Scheme 2008

Latest announcements

  • 5 August 2008 - The Scheme setting out the conduct and terms of allocation of allowances came into force from the 1st of August 2008, following sign off from the Lord's Commissioners.
  • 29 July 2008 - Government publishes the Scheme which sets out the conduct and terms of allocation of allowances. The Scheme will be made once signed by the Lord's Commissioners of the Treasury, but it is being published here in final form.
  • 29 July 2008 - HM Treasury announces the appointment of the Secretary of State for the Environment to conduct the auctions of allowances.

Key information

This page covers the following information:

  • Announcements relating to the person conducting the auction, as well as future announcements of the dates of auctions and number of allowances to be auctioned.
  • The secondary legislation governing allocation of EU ETS allowances is available in Adobe Acrobat Portable Document Format (PDF). If you do not have Adobe Acrobat installed on your computer you can download the software free of charge from the Adobe website. For alternative ways to read PDF documents and further information on website accessibility visit the HM Treasury accessibility page.

> The Community Emissions Trading Scheme (Allocation of Allowances for Payment) Regulations 2008 (OPSI website)
> The Community Emissions Trading Scheme (Allocation of Allowances for Payment) (Amendment) Regulations 2008 (OPSI website)
> The Community Emissions Trading Scheme (Allocation of Allowances for Payment) Scheme 2008 (PDF file 3MB)

  • Further information on the EU ETS, and auctioning of allowances can be found on the Defra website at:

http://www.defra.gov.uk/environment/climatechange/trading/eu/operators/auctioning.htm (Defra website)

Background - the secondary legislation

The Government has consulted on draft secondary legislation, as well as the proposed type, form and process for the auction or other allocation of EU allowances (EUAs) during Phase II of EU ETS. The Regulations and the Scheme underpin the preferred approach and allow Government to make allocations for payment of EU allowances by way of auctions or other routes to market. The Scheme sets out the conduct and terms of allocation, and includes details of the design of the auctions and the requirements in order to participate. The main Regulations came into force on 11 July 2008 following Parliamentary scrutiny.

In order to strengthen the framework for auctioning, the Government has identified the need for legal provisions to provide sufficient deterrent to wrongful disclosure of confidential information in auctions. The Government has therefore amended the enabling powers in Section 16 of the Finance Act 2007 by Section 164 of the Finance Act 2008 to allow for the creation of criminal offences in secondary legislation. The main Regulations have now been amended to create a criminal offence for the wrongful disclosure of confidential information relating to bids and those provisions were made on 22 July and will come into force on 12 August.

This version of the Scheme covers competitive bids only, where bids can only be placed though a Primary Participant. Government aims to have the non-competitive element of the auction in place for early 2009 and intends to publish a revised Scheme setting out the conduct of and terms for this in due course.

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