The commission has been considering early auctions for some time. It consulted over the New Year on plans to auction between 100 million and 300 million phase III allowances in 2012.
Industry representatives believe early auctions will reduce uncertainty over prices and ensure the market functions properly. Power firms, in particular, tend to buy allowances several years ahead to hedge against electricity contracts.
“Stakeholders have expressed a strong preference to have the early auction volume fixed now as this gives market actors time to adapt to the chosen level,” DG Climate director general Jos Delbeke said in a statement.
EU member states will now make a final decision by this summer through the EU climate change committee. The type of auction still needs to be decided.
Another 300 million allowances from the phase III new entrants reserve are already being auctioned by the European Investment Bank in 2012. This will fund the NER300 support scheme for renewable energy and carbon capture and storage projects.
NGOs have previously warned that selling too many allowances early will reduce revenues for the NER300.