The Decision adopted by the European Commission proposes to clarify the provisions of the EU ETS Directive on the timing of auctions of emission allowances. According to Climate Action Commissioner Connie Hedegaard, this short-term measure will improve the functioning of the market. If the political will is there, all the necessary decisions can be taken before the next auctioning phase starts at the beginning of 2013.

Based in the review of the auction time profile of the EU Emissions Trading System (ETS) initiated in mid-April, the European Commission has proposed a Decision to clarify the provisions of the EU ETS Directive on the timing of auctions of emission allowances. The Climate Action Commissioner Connie Hedegaard stressed that the Commission has paved the way for changing the timing of when allowances are auctioned because the EU ETS has a growing surplus of allowances built up over the last few years. It is not wise to deliberately continue to flood a market that is already oversupplied, she added. The Commission announced in May 2012 that emissions of greenhouse gases decreased by more than 2% in 2011.

The Commission proposed a specific technical amendment to the ETS Directive which aims to clarify that the timing of auctions within a trading period may be changed, in exceptional circumstances, by the Commission through amending the Regulation on auctioning in order to ensure the orderly functioning of the carbon market. In phase three of the EU ETS – running from 2013 to 2020 – a large amount of allowances will be auctioned, with the revenues accruing to Member States.

The EU ETS covers about 11,000 industrial installations and 45% of the EU's emissions. From this year aviation is also included in the EU ETS. In the third phase of the EU ETS (2013-2020), emissions from industrial installations have to be brought down to 21% below 2005 levels. The main changes in the third trading phase are the transition from caps set at Member State level to one single EU-wide cap per sector; transition from mainly free allocation to more than half of the allowances being auctioned; and harmonisation of free allocation rules based on ambitious EU-wide benchmarks.