Not exact matches
The fairness of the system has been substantially increased by the move towards EU - wide
free allocation rules for industrial installations and by the introduction of a redistribution mechanism that entitles new Member States to auction more
allowances.
While the great majority of
allowances has been allocated
free of charge to installations in the first and second trading periods, the Commission proposed that auctioning of
allowances should become the basic principle for
allocation.
The basic premise of cap and trade is that each year a certain amount of
allowances, or permits to pollute, are made available by a mix of
free allocation and quarterly auctions.
EPA is seeking comment on whether the model rule and proposed federal plan should include auctioning of some or all
allowances, rather than
free allocation, despite these requirements.)
EPA has designed its model mass - based trading program to use a
free -
allocation method of distributing
allowances.
Free allocation of
allowances can help compensate newly regulated sources for the cost of complying with the new regulations and may help reduce the risk for generators.
Europe's heavy industries fear the European Commission's post-2020 ETS reform proposal will bring increasing costs for them, as it cuts their
free allocation of CO2
allowances by a quarter while potentially trebling the market price of any additional units they will need to buy.
Rather than using a «
free allocation» method, some states pursuing mass - based compliance may choose to auction
allowances to polluters.
Nonetheless, a substantial share of
allowances is still distributed through
free allocation, with policy justifications including protection for trade - exposed industries and prevention of economic activity leakage outside of the European Union.
But any
allowance allocation formula — including
free allocation — can be applied equally well to the
allocation of tax revenue.