The Greenhouse Gas Emissions Trading Scheme Auctioning (Amendment) (No. 2) Regulations 2021
The Greenhouse Gas Emissions Trading Scheme Auctioning Regulations 2021 (the “Auctioning Regulations”) provide for the auctioning of allowances used in the UK Emissions Trading Scheme, which was established by the Greenhouse Gas Emissions Trading Scheme Order 2020, including for the appointment of an “auctioneer” and an “auction platform”. These Regulations amend the Auctioning Regulations, including correcting errors. The main changes are as follows:The way in which the annual volume of allowances to be auctioned in a calendar year is to be calculated is amended (see amendments to regulation 9 of the Auctioning Regulations).Where the proper conduct of an auction is, or is likely to be, disrupted, the appointed auction platform has the option of changing the date or time of the opening and close of the bidding window as well as cancelling the auction (see amendments to regulations 10 and 11).Where allowances provisionally earmarked for free allocation to certain industrial emitters are not in fact so allocated, the Treasury may authorise their release for auction as part of the cost containment mechanism (see amendments to regulation 12).A number of functions conferred on the Financial Conduct Authority are transferred to the auctioneer or the Treasury (see amendments to regulations 21, 23 and 36(4)).The appointed auction platform must provide regular information about auctions to the auctioneer and the Treasury (see amendment to regulation 36(3)).The appointed auction platform must keep records of checks carried out in refusing to grant admission to bid and revoking or suspending any admission to bid (see amendment to regulation 37(4)(b)).The appointed auction platform must inform the auctioneer and the Treasury when it reports market abuse to the Financial Conduct Authority (see amendments to regulation 39).Before maximum bid sizes and other remedial measures are imposed in the case of a risk of market abuse, the appointed auction platform must consult the auctioneer. Maximum bid sizes may be imposed on single entities as well as groups (see amendments to regulation 40).When announcing the results of an auction, the appointed auction platform must include details of the auctions to which the volume of any unsold allowances will be carried over (see amendment to regulation 44).The methodology for determining the prevailing secondary market price under regulation 7(4) of the Auctioning Regulations (including the price) is to be treated as confidential information. Confidential information may also be disclosed to the auctioneer, the UK ETS authority and the Treasury (see amendments to regulation 45).