Sale at market price until the start of auctioning
The Federal Environment Ministry has commissioned the KfW Banking Group with the sale of CO2 emission allowances, which will no longer be made available free of charge to energy utilities as of the beginning of the second trading period on 1 January 2008. From 2010 at the latest allowances will be auctioned.
The allocation of emission allowances at no charge during the first trading period has been criticised from many sides. For the second trading period (2008-2012) the European Emissions Trading Directive permits the sale and auctioning of up to ten percent of the allowances allocated. The Allocation Act 2012 makes use of this option: as of 2008, the number of allowances allocated to power plants will be reduced by a total of 40 million, which will be auc-tioned as of 2010 at the latest.
Until the start of auctioning, the German government will sell the allowances at the market price at stock exchanges where emission allowances are traded. Last week the Federal Environment Ministry, with the approval of the Federal Ministry of Finance, commissioned the KfW Banking Group to handle this sale. Starting in January 2008, the KfW will offer the emission allowances on a continuous basis and according to market liquidity at the existing trading places. Market participants will be informed every month about sales carried out by the KfW Banking Group.