Trading in the EU ETS

Emission allowances can be traded by companies, organisations and individuals – not just those covered by the EU ETS. To be able to manage allowances, an account in the Union Registry is required.

To comply with the EU ETS, operators may buy allowances from others or at auctions. Some operators also receive free allocation of emission allowances.

Trading in allowances is not limited to those operators who are obliged to participate in the EU ETS. Other companies, organisations and individuals can also buy and sell emission allowances. To be able to hold, trade and transfer allowances, an account in the Union Registry is required.

The Registry is not a marketplace and therefore does not handle contracts or price information. It only handles allowances and transactions of allowances. If you want to trade, you must therefore contact a counterparty yourself.

Trading can take place through auctions or directly between two parties, known as OTC trading (over-the-counter trading).

Auctioning is the main method of obtaining emission allowances in the EU ETS.

The European Commission has contracted the European Energy Exchange AG (EEX) and its clearing system European Commodity Clearing AG (ECC) for the common auction platform under the EU ETS.

EEX holds regular auctions of General Allowances (EUA) and Aviation Allowances (EUAA). Over the period 2021-2030, up to 57% of the general allowances will be auctioned. The remaining allowances will be allocated for free to reduce the risk of carbon leakage and stimulate the deployment of low-carbon technologies. Auction calendars are determined by the auction platform. This is done in accordance with the requirements of the Auctioning Regulation which regulates timing, frequency and distribution of auction volumes. Auctioning of allowances is held approximately three times a week for general emission allowances and a few times a year for aviation allowances.

Trading can take place either through spot trading, where units are transferred to the buyer after purchase, or through derivative instruments. Member States auction allowances according to the rules of the EU ETS Directive and the Auctioning Regulation.

The EU Emissions Trading Directive (europa.eu)

The Auctioning Regulation (europa.eu)

Auctioning is regulated in the Auctioning Regulation which specifies the timing, administration and other aspects of the auction to ensure that it is conducted in an open, transparent, harmonised and non-discriminatory manner. More information about the auction process, including the auction calendar and fees, can be found on the EEX website.

EU ETS Auctions (eex.com)

Auctioning of allowances (europa.eu)

Trading in allowances can take place directly between two parties, also known as OTC trading (over-the-counter trading). For example, a buyer with a deficit of allowances can buy allowances from a company with a surplus of emission allowances. Trading can also take place through brokers, such as banks. Anyone with an account in the Union Registry can engage in OTC trading.

Trading in the EU ETS

Auctioning

Over-the-counter (OTC)