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Sale of NER300’s last 100m EUAs to start mid-November

08 Oct 2013 20:18:17 | edcm

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The sale of the remaining 100m allowances of the NER300 funding scheme will start in mid-November and is expected to take place over five months, depending on liquidity, according to the European Investment Bank (EIB) – tasked with carrying out the sales on the European Commission’s behalf – on Tuesday in a media call.

The allowances will add to the oversupplied market and are likely to put pressure on prices in the short term. They will be sold on ICE Futures Europe and the European Energy Exchange (EEX) as future contracts on the secondary market. This means no dedicated auction will take place to minimise any market impact.

“Depending on liquidity, the expectation is selling on average 20m EUAs a month,” an EIB employee said. The bank would not comment on how the volume will be split between the two platforms.

The sales will be completed before the decision to award projects money from the second call of the NER300 fund, expected in mid-2014.

The NER300 programme, managed by the European Commission, was originally aimed at financing a demonstration programme for carbon capture and storage (CCS) and innovative renewable energy technologies on a commercial scale. The programme is funded by the sale of 300m EUAs from the new entrants’ reserve (NER) for phase III of the EU emissions trading system (ETS). The revenues are to be distributed to projects selected from two rounds of calls for proposals – 200m EUAs for the first call and 100m EUAs for the second call.

Under the first call for proposals, no CCS technologies were funded. But the €1.2bn gained from the first sales was awarded to 23 renewable projects, which now must reach their final investment decisions by the end of 2014, and enter into operation by the end of 2016.

The second call was launched in April 2013 and will be funded via this latest sale and unused funds from the first call. Among the 33 projects submitted, only one is CCS (from the UK). Silvia Molteni

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