LONDON (Reuters) - German energy and emissions exchange EEX will start auctioning Phase Three European Union carbon permits on behalf of the German government on October 12, it said on Friday, making it the first bourse to begin the eagerly awaited early sales.
The EU's Emissions Trading Scheme caps carbon emissions on more than 12,000 industrial and power plants across the 27-nation bloc and governments are allowed to sell a certain number of carbon permits each year.
The scheme's third trading period starts next year and lasts until 2020. During that time, power generators operating under the ETS will no longer receive the bulk of their carbon permits, called EU Allowances (EUAs), for free and most will be auctioned.
The EU Commission decided in 2011 that around 120 million EUAs for the third phase would be auctioned early to help power companies hedge forward power sales.
Market participants have been eagerly awaiting the timing of the early sales because the market is already over-supplied with over 1 billion permits which has put pressure on prices.
Data compiled by Thomson Reuters Point Carbon has shown that state-backed sales of EUAs could exceed 200 million units in the last three-and-a-half months of 2012.
EEX will auction a total of some 23.5 million EUAs for the third trading phase in 2012.
It will begin by auctioning 2.4 million EUAs on its spot market every Friday from October 12. The last auction of the year will take place on December 14 and will sell around 1.93 million EUAs.
In addition, EEX will sell a total of 5 million EUAs for the aviation sector for the second trading phase (2008-2012) on the spot market in two auctions on October 17 and November 14.
EEX is currently still auctioning EUAs for the second trading period but the last auction on the derivatives market will be on October 31. Remaining volumes will be auctioned on the spot market every Tuesday from November 6.
All auction dates and volumes are available at www.eex.com.
Benchmark EUAs for December 2012 delivery were up 0.25 percent at 7.88 euros a tonne at 1056 GMT.
(Reporting by Nina Chestney; additional reporting by Michael Szabo; editing by James Jukwey)
