|Flawed application of the auction reserve price in the EU ETS - Page 2|
|Thursday, 23 February 2012 07:07|
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The draft methodology must be established by the contractor no later than five days after the kick-off meeting, which will be organised following the entry into force of the contract.
The setting up the procedure envisioned involve the opinions of the auction monitor and of the contract management committee. The said bodies have also its role in any modifications of the procedure.
It is also provided for in the Draft Tender Specifications that the contract management committee can at all times, through the European Commission, request the contractor to consider modifying the methodology providing the reasons for such request. Within 10 days of such a request the contractor must submit to the Commission a draft modification, or a reasoned opinion explaining why a modification of the methodology would not be necessary. The Commission will forward any draft modification to the contract management committee and to the auction monitor.
To be precise it is necessary to mention that the auction platform to be appointed pursuant to the present joint procurement procedure is to auction allowances for a transitional period until a definitive common auction platform becomes operative. The transitional common auction platform will cease auctioning allowances under the contract, two days before the date scheduled for the first auction conducted by the definitive common auction platform.
It all sounds great save for the fact, as I have recalled above, that information on the methodology at issue is confidential data not disclosed to bidders (Article 62(1)(i) of the Auctioning Regulation). Bidders have to believe the auction monitor that everything in auction mechanisms is all right – but it is only belief. California’s and Australia’s cap-and-trade schemes, however offer the bidders – as was mentioned – much more concrete data as regards auction reserve price for market analysis. The market certainty and predictability considerations also in that regard support the two other than EU ETS cap scheme designs.