Overview
The emission certificates in the EU ETS 2 are fully auctioned in accordance with the requirements of the Emissions Trading Directive (2003/87/EC) and the EU Auctioning Regulation (Delegated Regulation (EU) 2023/2830). For the EU ETS 2, all emission certificates are auctioned at the European Energy Exchange (EEX), which has been jointly commissioned by the European Commission and the Member States as an auction platform. The first EUA2 auction date as part of the “early auctions” will take place on 18/01/2027. In 2027, auctions of emission certificates will be held weekly on Monday, Tuesday and Thursday from 1 p.m. to 3 p.m. (CET) on the regulated EEX market. Emission certificates are classified as financial instruments under Directive 2014/65/EU on Markets in Financial Instruments (MiFID II).
Auction calendar
EEX: Auction Calendar EU ETS 2
Unlike the national emissions trading system (nEHS) in Germany, the EU ETS 2 does not provide for fixed prices or a price corridor in the auction process. This means that free market price formation, based on supply and demand, will already be in place with the launch of the EU ETS 2. Despite the implementation of price stabilising mechanisms via the market stability reserve, there will explicitly be no predefined price ceiling.
Operators in the EU ETS 2 must surrender emission certificates no earlier than 31/05/2029 for emissions from the 2028 reporting year. The following publications provide an initial overview of the EU ETS 2 (as of 2023 and 2024):
Supply and demand in the ETS 2
(available in German only)
How does the EU ETS 2 auction process work?
Similarly to EU ETS 1, auctions of spot contracts are conducted according to the well-established uniform price procedure with a bidding round and a closed order book. In the uniform price procedure, all successful bidders pay the same price (see graph below).
In the uniform price procedure, the hammer price is determined by ranking all bids that have been admitted, starting with the highest bid, according to the bid price amount.
Bids are sorted randomly if the bid prices are the same. Starting from the highest price bid, the quantities of the bids are added up until the quantity offered (in this case, 2 million emission certificates (EUA2)) is reached. The bid price, at which the sum of the quantities of bids reaches or exceeds the quantity of the emission certificates offered, determines the hammer price and is identical to it (in this case, bid F).
Bidders therefore receive the amount of the quantity requested if their bid price is at least equal to the amount of the hammer price. If a bidder has offered the exact hammer price, the allocation is then equal to the remaining quantity of the bid. Depending on the bid structure, this may also be lower than the quantity requested by the bidder. If several trading participants have offered the exact hammer price, the aforementioned random selection procedure applies.
How can I participate in EU ETS 2 auctions?
The EU Auctioning Regulation guarantees EU ETS 2 participants harmonised, non-discriminatory and cost-effective access to the European primary market for emission certificates. It sets out minimum requirements for proper access conditions. This is intended to enable a high number of bidders, especially companies that are subject to emissions trading. In addition, it is intended to ensure the reliability and integrity of the auction process. Access conditions are based on secondary market practices and also allow persons that are not subject to emissions trading to participate in the auctions. Participating in EEX primary market auctions requires, among other things, an account in the Union Registry. For further information about opening accounts in the Union Registry, see:
More about the migration from nEHS Registriy to Union Registry
Trading participants who have already been admitted to the secondary market of the Leipzig-based European Energy Exchange (EEX) can participate in the auctions without any complications or further admission costs. Generally, the auction participation fees must not be higher than comparable standard fees on the secondary market. Detailed information on the terms and conditions of participating is available on the EEX website. Along with direct internet-based participation, the EU Auctioning Regulation also allows indirect access via authorised financial intermediaries.
Further information
(partly in German)
EEX: Information on EU ETS 2 auction participation
footnote