The government has held Europe's first carbon allowance auction in Phase II (2008 - 2012) of the EU Emissions Trading Scheme (EU ETS).

The EU ETS puts a cap on emissions from around 12,000 installations throughout the EU, including the energy and heavy industrial sectors. These sectors are said to collectively be responsible for close to half of the EU's emissions of carbon dioxide.

Energy and Climate Change Minister of State, Mike O'Brien, said: "Today's first Phase II auction demonstrates continued UK leadership in reducing carbon emissions as part of the fight against dangerous climate change. The EU ETS is central to keeping the price of tackling climate change as low as possible to industry and the economy.”

O’Brien said that the government was to hold more auctions in the future, and that they highlight the importance of using the market to drive down emissions and create incentives for the development of low carbon technology.