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The temporary exemption of the electricity sector under the third EU ETS periodPublished: 1 of March, 2013

For the third period (2013-2020) of the European emission trading system (ETS) a new principle is applied to allocate to all emission allowances. While the second period was characterised primarily by free allocation (memberstates were allowed to auction up to 10% of the total amount), starting in 2013 only about half of the allowances will be handed out for free. The allocation method was changed by the European Commission because auctioning is expected to eliminate the windfall profit of power plants generated by free allocation, while also ensuring equivalent conditions to new entrants