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ICE Futures Europe selected for UK carbon auctions

London, 23 April 2012

The UK's Department of Energy and Climate Change (DECC) has announced that it has selected London-based ICE Futures Europe as its preferred supplier to conduct auctions of Phase III and aviation EU ETS allowances on behalf of the UK Government. Subject to successful completion of the European Commission notification and listing process the auctioning of the UK’s phase III and aviation auctions allowances will start in November.

Greg Barker, Minister of State, said, “This announcement is an important step towards ensuring that we can start auctioning phase III and aviation allowances on time.  The bid put forward by ICE Futures Europe will help to ensure value for money and the continued success of UK carbon auctioning into phase III; I look forward to working with ICE Futures Europe over the coming months”. 

The contract will be to run the UK’s definitive EU ETS auction platform.  It will be awarded for three years, extendable by a further two.  It is expected that the contract will be formally awarded shortly.

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The European Union Emission Trading System (EU ETS) is at the heart of Europe's policy to tackle climate change. In Phase II (2008-2012) Member States (MS) can auction up to 10% of EU emissions allowances.  The UK opted to auction at least 7% of its allowances compared to the EU average of 3%. 

In 2008, the EU ETS Directive was revised to make auctioning the main method for allocating emissions allowances in Phase III of the EU ETS (2013-2020).  In Phase III, at least 50% of general emissions allowances will be auctioned across the EU.  In addition, MS will auction 15% of aviation allowances.

The EU Auctioning Regulation  governs the auctioning of carbon allowances for aviation and phase III.  It foresees the establishment of a common EU auctioning platform, but Member States have the right to opt out and set up their own national platforms.  The UK, Germany and Poland have exercised this right.