Industry NewsDefying some expectations, the UK's latest auction of carbon allowances was oversubscribed. The auction has been lauded by the Government, which has been quick to highlight the UK registry was one of the first to reopen after security concerns.
Nearly 30 million carbon allowances were bid for in the auction on Thursday (10 February 2011). This means the scheme observed a near seven-fold over subscription. In the end, the auction raised just over €6 million for the Treasury, with the clearing price set at €14.36/tCO2e. This was a little below the prices seen on ICE for carbon, but in line with the French bourse. Six more auctions are set for 2011, with the Government also just announcing the date of the final five between April and December.
There had been speculation that interest in the auction would be slim. This was based on concerns that bidders would be uncertain over the legality of the allowances they would ultimately receive. After the theft of millions of allowances which led to the European Commission closing registries, there remains uncertainty over the number and location of the remaining stolen allowances.
Climate Change Minister Greg Barker welcomed the auction results, saying, "Today's successful auction is a testament to the high level of security the UK applies to its registry. Swift action meant that the UK was one of the first registries to reopen following recent cyber security attacks."