Free allocations to the private sector forego such opportunities.
Many blueprints for emissions-trading in America call for no free allocations whatsoever.
Of eight EU nations eligible for the free allocations, Poland claimed 60% of the total up until 2019.
Steven Cliff, the California regulator most familiar with food processing, said that companies need the free allocations in the early years.
Auctioning EUAs rather than giving them away would eliminate the windfall-profit taking and other perverse incentives wrought by free allocations.
Last week, the European Commission conditionally ruled that three 10c applicants – Bulgaria, the Czech Republic and Romania – could temporarily continue to receive free allocations despite claims by environmentalists of irregularities in the Czech application in particular.
The carbon market is supposed to drive Europe's transition to cleaner sources of energy, but a cocktail of recession, free allocations to polluters and over-achievement on green energy targets have created a flood of 2bn allowances.
In a missive dated 11 March 2009, Pawlak complained of "contradictory wording" in the ETS and requested an amendment to it, which would extend the free allocations of carbon allowances for 10c applicants.
