The EU ETS sets a cap on the total emissions from the main industrial sectors across Europe, covering more than 10,000 installations in the energy and industrial sectors. The UK is one of the Member States going furthest on auctioning in Phase II, within the limits set by the EU Directive.
Angela Eagle said: "The UK is leading the way across Europe in efforts to cut carbon emissions and ensure companies work now to put in place the long term solutions to tackle climate change. Auctioning carbon allowances will create greater incentives for companies to reduce emissions and provide stability and transparency in this emerging market."
The Treasury has appointed Defra to conduct the auctions, and Defra has appointed the UK Debt Management Office (DMO) to act as its agent in running the auctions in Phase II.
Environment Minister, Phil Woolas commented: "The UK is at the forefront of the fight against climate change and putting in place tools which mean that what's good for the environment is also good for business. Auctioning these allowances marks an important step forward in developing a system where market forces create financial incentives for major carbon emitters to reduce their emissions. This will help stimulate the development of green technology and British business can begin to realise the benefits of being leaders of the low carbon revolution."