Government sets second carbon auction date for March

The government yesterday announced that it will hold its second auction of EU emissions trading scheme carbon credits on March 24, and confirmed that it is still seeking to expand the number of companies taking part in the auction process.

The second auction of EU Allowances (EUAs) for use in the second phase of the EU Emissions Trading Scheme (ETS) will see a competitive bidding process undertaken between 8am and 10am on the morning of March 24.

It follows the first auction of credits last November, which saw four million EUAs successfully sold at €16.15, raising £54m for the treasury.

The Department of Energy and Climate Change (DECC) has not yet confirmed how many credits will be made available at the next auction, but promised that the size of the auction would be announced by February 24 at the latest.

Firms interested in buying credits at the auction will be able to place bids through intermediaries, known as primary participants.

Currently, Barclays Capital, JP Morgan, BNP Paribas and Morgan Stanley have been approved to act as primary particpants, but a spokesman for DECC said it was keen to make the process more competitive and had reopened the application window for firms to become primary participants.

"We are keen to have more organisations involved and talks are on-going with other big players," he said, adding that becoming a primary participant offered carbon trading organsations an effective means to underscore their commitment to the market.

Decc said that the application window for new primary participants would now stay open throughout the current trading phase, which runs until the end of 2012.

It added that application forms and any supporting documentation would have to be received by DECC at least one calendar month before any auction date for an institution to be permitted to participate directly in that auction.