First opinions in the European Commission’s consultation on the auctioning
- Category: Legal Alert
We remind, that it is now running the period for submission to the European Commission of opinions and remarks in respect of the future shape of the auctioning system.
Their opinions expressed inter alia the Danish Energy Association and the the Association of the Austrian Electricity Companies.
According to both opinions, a single-round sealed-bid auction is the most appropriate auction format for auctioning EU allowances. In the views of the stakeholders, the most appropriate pricing rule for the auctioning of EU allowances is uniform-pricing.
Rationale for this is the view that such a formula gives a clear price signal for the value of an EUA, thereby increasing predictability. It also ensures that every successful participant pays the same price, meaning that the auction price will be fair and minimises the risk of distorting the secondary market.
Both organisations also consider, that the rule for solving ties in the future Regulation should be pro-rata re-scaling of bids.
The opinions of both stakeholders are also consistent in that there should no reserve price apply.