Commission Delegated Regulation (EU) 2023/2830 of 17 October 2023 supplementing Directive 2003/87/EC of the European Parliament and of the Council by laying down rules on the timing, administration and other aspects of auctioning of greenhouse gas emission allowances

CHAPTER I GENERAL PROVISIONS

Article 1

Subject Matter

This Regulation provides for rules on the timing, administration and other aspects of the auctioning of allowances under Directive 2003/87/EC.

Article 2

Scope

This Regulation shall apply to the allocation through auctions of allowances under Directive 2003/87/EC.

Article 3

Definitions

For the purposes of this Regulation, the following definitions shall apply:

• (1) ‘two-day spot contracts’ means contracts by which allowances are auctioned for delivery at an agreed date no later than the second trading day following the day of the auction;

• (2) ‘bid’ means an offer in an auction to acquire a given volume of allowances at a specified price;

• (3) ‘bidding window’ means the time period during which bids may be submitted;

• (4) ‘trading day’ means any day during which an auction platform and the clearing system or settlement system connected to it are open for trading;

• (5) ‘investment firm’ means investment firm as defined in Article 4(1), point (1), of Directive 2014/65/EU;

• (6) ‘credit institution’ means credit institution as defined in Article 4(1), point (1), of Regulation (EU) No 575/2013 of the European Parliament and of the Council ([^E0001]);

• (7) ‘financial instrument’ means financial instrument as defined in Article 4(1), point (15), of Directive 2014/65/EU;

• (8) ‘secondary market’ means the market in which persons buy or sell allowances either before or after they are allocated either free of charge or through auctioning;

• (9) ‘parent undertaking’ means parent undertaking as defined in Article 2, point (9), of Directive 2013/34/EU of the European Parliament and of the Council ([^E0002]);

• (10) ‘subsidiary undertaking’ means subsidiary undertaking as defined in Article 2, point (10), of Directive 2013/34/EU;

• (11) ‘affiliate undertaking’ means affiliate undertaking as defined in Article 2, point (12), of Directive 2013/34/EU;

• (12) ‘control’ means control as referred to in Article 3(2) and (3) of Council Regulation No 139/2004 ([^E0003]);

• (13) ‘auction process’ means the process encompassing the setting of the auction calendar, the procedures for admission to bid, the procedures for submission of bids, the conduct of the auction, the calculation and announcement of the auction results, the arrangements for payment of the price due and transfer of auction proceeds, delivery of the allowances and management of the collateral needed to cover any transaction risks, as well as the surveillance and monitoring of the proper conduct of the auctions by an auction platform;

• (14) ‘money laundering’ means money laundering as defined in Article 1(3), (4) and (6) of Directive (EU) 2015/849 of the European Parliament and of the Council ([^E0004]);

• (15) ‘terrorist financing’ means terrorist financing as defined in Article 1(5) and (6) of Directive (EU) 2015/849;

• (16) ‘criminal activity’ means criminal activity as defined in Article 3, point (4), of Directive (EU) 2015/849;

• (17) ‘auction platform’ means any public or private entity appointed to carry out the tasks referred to in Articles 27, 28, 30 and 31;

• (18) ‘common auction platform’ means the auction platform appointed following a joint procurement procedure between the Commission and the Member States, as contracting authorities, pursuant to Article 26(1)

• (19) ‘opt-out auction platform’ means the auction platform appointed by a Member State not participating in the joint action as provided in Article 26(1), as its own auction platform, pursuant to Article 29(1)

• (20) ‘auctioneer’ means any public or private entity appointed to carry out the tasks referred to in Article 23;

• (21) ‘nominated Union Registry account’ means an account in the Union Registry established by Delegated Regulation (EU) 2019/1122;

• (22) ‘nominated bank account’ means a bank account designated by an auctioneer, a bidder or bidder’s successor in title for the receipt of payments due under this Regulation;

• (23) ‘customer due diligence measures’ means the customer due diligence measures as referred to in Article 13 of Directive (EU) 2015/849 and the enhanced customer due diligence measures as set out in Articles 18, 18a and 20 of that Directive;

• (24) ‘beneficial owner’ means beneficial owner as defined in Article 3, point (6), of Directive (EU) 2015/849;

• (25) ‘duly certified copy’ means an authentic copy of an original document that is certified as being a true copy of the original by a qualified lawyer, accountant, notary public or similar professional who is recognised under the national law of the Member State concerned to attest officially as to whether a copy is in fact a true copy of its original;

• (26) ‘politically exposed person’ means politically exposed person as defined in Article 3, point (9), of Directive (EU) 2015/849;

• (27) ‘market abuse’ means market abuse as defined in Article 1 of Regulation (EU) No 596/2014;

• (28) ‘inside information’ means inside information as defined in Article 7 of Regulation (EU) No 596/2014;

• (29) ‘insider dealing’ means insider dealing as defined in Article 8 of Regulation (EU) No 596/2014;

• (30) ‘unlawful disclosure of inside information’ means unlawful disclosure of inside information as defined in Article 10 of Regulation (EU) No 596/2014;

• (31) ‘market manipulation’ means market manipulation as defined in Article 12 of Regulation (EU) No 596/2014;

• (32) ‘clearing system’ means an infrastructure connected to the auction platform that provides clearing, margining, netting, management of collateral, settlement and delivery, and any other services, carried out by a central counterparty that is accessed either directly or indirectly through members of the central counterparty who act as intermediaries between their clients and the central counterparty;

• (33) ‘clearing’ means all processes taking place before the opening of the bidding window, during the bidding window and after the closing of the bidding window until settlement, and involving the management of any risks arising during that interval, including during margining, netting, or novation, or any other services, possibly carried out by a clearing or settlement system;

• (34) ‘margining’ means the process by which collateral is pledged by an auctioneer or a bidder, or one or more intermediaries acting on their behalf, to cover a given financial position, encompassing the entire process of measuring, calculating and administering the collateral put up to cover such financial positions, and which is intended to ensure that all payment commitments of a bidder and all delivery commitments of an auctioneer or one or more intermediaries acting on their behalf can be met within a very short period of time;

• (35) ‘settlement’ means payment by a successful bidder or its successor in title, or by a central counterparty or a settlement agent of the sum due for allowances to be delivered to that bidder or its successor in title or to a central counterparty or a settlement agent, and delivery of the allowances to the successful bidder or its successor in title, or to the central counterparty or the settlement agent;

• (36) ‘central counterparty’ means an entity that interposes either directly between an auctioneer and a bidder or its successor in title, or between intermediaries representing them, and acts as the exclusive counterparty to each of them guaranteeing the payment of the auction proceeds to the auctioneer or an intermediary representing it or the delivery of the auctioned allowances to the bidder or an intermediary representing it;

• (37) ‘settlement system’ means any infrastructure, whether or not connected to the auction platform, that provides settlement services, which include clearing, netting, management of collateral, or any other services and which ultimately enable the payment of the sum due by a successful bidder or its successor in title to an auctioneer, and the delivery of allowances on behalf of an auctioneer to a successful bidder or its successor in title, where those services are carried out through either of the following:
• (a) the banking system and the Union Registry;
• (b) one or more settlement agents acting on behalf of an auctioneer and a bidder or its successor in title, accessing the settlement agent either directly or indirectly through members of the settlement agent who act as intermediaries between their clients and the settlement agent;

• (38) ‘settlement agent’ means an entity acting as an agent providing accounts to the auction platform, through which accounts instructions for the transfer of the auctioned allowances given by the auctioneer or an intermediary representing it and for the payment of the auction clearing price by a successful bidder, its successor in title or an intermediary representing them are safely executed either simultaneously or nearly simultaneously in a guaranteed manner;

• (39) ‘collateral’ means collateral security as defined in Article 2, point (m), of Directive 98/26/EC of the European Parliament and of the Council ([^E0005]), including any allowances accepted as security by the clearing system or settlement system;

• (40) ‘regulated market’ means regulated market as defined in Article 4(1), point (21), of Directive 2014/65/EU;

• (41) ‘SMEs’ means operators, aircraft operators, shipping companies or regulated entities that are small and medium-sized enterprises within the meaning of Commission Recommendation 2003/361/EC ([^E0006]);

• (42) ‘market operator’ means market operator as defined in Article 4(1), point (18), of Directive 2014/65/EU;

• (43) ‘Member State of establishment’ means any of the following:
• (a) in the case of persons referred to in Article 6(3), second subparagraph of this Regulation, the Member State where the person has its place of residence or permanent address;
• (b) in the case of persons referred to in Article 18(1), point (b), and Article 18(2), and of business groupings referred to in Article 18(1), point (d), of this Regulation, home Member State as defined in Article 4(1), point (55)(a), of Directive 2014/65/EU;
• (c) in the case of persons referred to in Article 18(1), point (c), of this Regulation, home Member State as defined in Article 4(1), point (43), of Regulation (EU) No 575/2013;
• (d) in the case of a regulated market referred to in Article 33(4), (5) and (6) of this Regulation, home Member State as defined in Article 4(1), point (55)(b), of Directive 2014/65/EU;

• (44) ‘exit strategy’ means one or more documents that are determined in accordance with the contracts appointing the auction platform concerned and that set out detailed measures planned to ensure the following:
• (a) the transfer of all tangible and intangible assets necessary for the uninterrupted continuation of the auctions and the smooth operation of the auction process by an auction platform’s successor;
• (b) the provision of all information relating to the auction process, that is necessary for the procurement procedure for the appointment of the auction platform’s successor;
• (c) the provision of the technical assistance that enables the contracting authorities or the auction platform’s successor or any combination of these to understand, access or use the relevant assets provided pursuant to points (a) and (b).

CHAPTER II THE DESIGN OF AUCTIONS

Article 4

Auctioned products

Article 5

Auction format

Auctions shall be carried out through an auction format whereby bidders shall submit their bids during a given bidding window without seeing bids submitted by other bidders. Each successful bidder shall pay the auction clearing price referred to in Article 7 for each allowance regardless of the price bid.

Article 6

Submission and withdrawal of bids

• (a) the identity of the bidder and whether the bidder is bidding on its own account or on behalf of a client;

• (b) where the bidder is bidding on behalf of a client, the identity of the client;

• (c) the volume bid as a number of allowances in integral multiples of lots referred to in paragraph 1;

• (d) the price bid in euro for each allowance, rounded to two decimal points.

Only a natural person established in the Union, appointed pursuant to Article 19(2), point (d), and authorised to bind a bidder for all purposes relating to the auctions, including the submission of a bid (the ‘bidder’s representative’), is entitled to submit, modify or withdraw a bid on behalf of a bidder.

Once submitted, each bid shall be binding, unless it is withdrawn or modified pursuant to this paragraph or withdrawn pursuant to paragraph 4.

Article 7

Auction clearing price and resolution of tied bids

An auction platform shall sort bids submitted to it in the order of the price bid. Where the price of several bids is the same, those bids shall be sorted through a random selection according to an algorithm determined by the auction platform before the auction.

Between two bidding windows on the same auction platform, the auction platform concerned may modify the methodology referred to in the first subparagraph. It shall consult the relevant contracting authorities referred to in Article 26(1) or Article 29(4) and the competent national authorities referred to in Article 47 on the planned modifications without delay.

The auction platform concerned shall take the utmost account of the opinion of the relevant contracting authority on the methodology referred to in this paragraph, where such an opinion has been provided.

The auction platform may extend the period referred to in the first subparagraph by 2 months, after having consulted the relevant contracting authorities referred to in Article 26(1) and notifying the competent national authorities referred to in Article 47, provided that such extension is necessary to ensure that a sufficiently liquid secondary market is in place for the application of paragraph 6.

The auction platform concerned shall take the utmost account of the opinion of the relevant contracting authorities on the extension referred to in this paragraph, where such an opinion has been provided.

Where the volume of allowances from cancelled auctions referred to in the first subparagraph cannot be distributed evenly as referred to in that subparagraph in accordance with the rules on minimum volume bid set out in Article 6(1), the Member State concerned shall auction those allowances over fewer than four auctions.

Where an auction that already includes volumes from a previously cancelled auction is cancelled, its volume shall be spread in accordance with the first and second subparagraphs starting from the first auction which is not subject to other adjustments due to previous cancellations.

Where the volume of allowances from cancelled auctions referred to in the first subparagraph cannot be distributed evenly as referred to in that subparagraph in accordance with the rules on minimum volume bid set in Article 6(1), the Member State concerned shall auction those allowances in the next scheduled auction.

From 1 January 2025, where an auction including allowances covered by Article 11 is cancelled, paragraph 9 shall apply.

CHAPTER III AUCTIONS CALENDARS

Article 8

Timing, frequency and distribution of the volume of allowances

The bidding windows for auctions of allowances referred to in Article 13 conducted by the common auction platform shall be separate from the bidding windows for auctions of allowances referred to in Articles 10 and 11.

The bidding window shall be opened and closed on the same trading day and shall be kept open for no less than two hours. There shall be at least a two-hour delay between two consecutive bidding windows. The bidding windows of any two or more auction platforms shall not overlap.

The bidding windows for auctions of allowances referred to in Articles 10, 11 and 13 shall not overlap. From 1 January 2025, the allowances referred to in Articles 10 and 11 shall be auctioned in the same bidding windows.

By way of derogation from the first subparagraph, the common auction platform may conduct auctions of allowances referred to in Article 13 at other frequencies in the first six auctions, provided that this is necessary to improve the participation in the auctions and ensure the smooth operation of the auction process.

Where the common auction platform conducts auctions of the allowances referred to in Articles 10 and 11 in one or two days a week, no opt-out auction platform shall conduct an auction on those days.

Where the common auction platform conducts auctions of the allowances referred to in Articles 10 and 11 on more than two days a week, it shall choose two days on which no opt-out auctions may take place. It shall publish those days no later than at the publication of the auction calendar as referred to in Article 12(2).

The volume of allowances referred to in Article 13 to be auctioned on a common auction platform shall in principle be distributed evenly over the auctions held in a given calendar year.

By way of derogation from the second subparagraph, the volume of allowances referred to in Article 13 to be auctioned for the first year of auctioning in accordance with Article 30d(2) of Directive 2003/87/EC, shall be distributed in the period from 1 January 2027 up to 31 December 2028.

Where the annual volume of allowances of a Member State cannot be distributed evenly over the auctions in a given calendar year in accordance with the rules for minimum volume bid set out in Article 6(1), the relevant auction platform shall distribute that volume over fewer auctions, ensuring that the volume is auctioned, in principle, at least every quarter.

Article 9

Circumstances preventing the conduct of auctions

An auction platform may cancel an auction where the proper conduct of that auction is disrupted or is likely to be disrupted. The volume of allowances of the cancelled auctions shall be distributed in accordance with Article 7(9).

Article 10

Annual volumes of auctioned allowances in respect of maritime transport activities and stationary installations

• (a) Article 3gb, Article 10a(5a), Articles 10c and 10ca, Article 10d(4), Article 10e(3), Article 12(3-e) and (4), and Articles 24, 27, 27a and 29a of Directive 2003/87/EC;

• (b) Article 1 of Decision (EU) 2015/1814;

• (c) Article 6 of Regulation (EU) 2018/842 of the European Parliament and of the Council ([^E0007]).

Any volume of allowances that cannot be auctioned in a given calendar year due to the rounding required by Article 6(1) shall be accounted for in the volume of allowances to be auctioned in the subsequent calendar year.

• (a) the volume of allowances and the date when they are made available to the Innovation Fund pursuant to Article 9, fourth paragraph, Article 10a(1), (1a) and (5b), Article 10a(8), first, third and fourth subparagraphs, and Article 10e(4) of Directive 2003/87/EC;

• (b) the frontloading of allowances for the Innovation Fund pursuant to Article 10a(8), second subparagraph, of Directive 2003/87/EC;

• (c) the volume of allowances to be auctioned for the Recovery and Resilience Facility pursuant to Article 10e(2) until 31 August 2026.

Without prejudice to the first subparagraph, the annual volume of allowances to be auctioned pursuant to Article 10a(8) of Directive 2003/87/EC shall be at least 40 000 000 allowances. That volume shall be reflected in the auction calendar referred to in Article 12 of this Regulation.

• (a) for 2024: 86 685 000 allowances;

• (b) for 2025: 86 685 000 allowances;

• (c) for 2026: 58 000 000 allowances.

The annual volume of allowances that need to be auctioned to reach the revenue referred to in Article 10e(2) and (3) of Directive 2003/87/EC may be adjusted to ensure that the objectives set out in Article 10e of that Directive are met. For the purposes of that adjustment, the revenue already obtained, the average auction clearing price for the six preceding calendar months, and the time remaining until 31 August 2026 shall be taken into account and the auction calendars shall be adjusted accordingly in accordance with Article 14(1), point (o) of this Regulation.

If the auction revenue referred to in Article 10e(2) and (3) of Directive 2003/87/EC is reached before the date of the last auction scheduled for the Recovery and Resilience Facility, the subsequent auctions of allowances for that Facility shall be immediately suspended in line with the relevant provisions for suspension of such auctions set out in Delegated Regulation (EU) 2019/1122. The relevant auction calendars shall be adjusted accordingly in accordance with Article 14(1), point (e) of this Regulation.

Article 11

Annual volumes of auctioned allowances in respect of aviation

Article 12

Auction calendar for individual auctions of allowances referred to in Articles 10 and 11 auctioned by the common auction platform

Article 13

Annual volumes and calendars for individual auctions of allowances in respect of buildings, road transport and additional sectors

If the auction revenue referred to in Article 30d of Directive 2003/87/EC is reached before the date of the last auction scheduled for the Social Climate Fund, the subsequent auctions of allowances for that Fund shall be suspended in line with the relevant provisions for suspension of such auctions set out in Delegated Regulation (EU) 2019/1122. The relevant auction calendars shall be adjusted accordingly in accordance with Article 14(1), point (e) of this Regulation.

Once the legislation referred to in the first subparagraph has been implemented, the volume of allowances referred to in the first subparagraph which was withheld for the period between the year from when emissions are subject to such legislation and the date of application of that legislation shall be added to the auction calendars.

Where the volumes of allowances referred to in the second subparagraph is added back to the auction volumes, it shall be distributed over a period of time equivalent to the period of time during which those allowances were not auctioned.

Article 14

Adjustments of auction calendars and of the volume of allowances to be auctioned

• (a) the cancellation of an auction pursuant to Article 7(5) and (6), Article 9 and Article 31(4);

• (b) the suspension of an opt-out platform that is provided for in Delegated Regulation (EU) 2019/1122;

• (c) a decision by a Member State pursuant to Article 29(7);

• (d) a settlement failure referred to in Article 36(5);

• (e) the suspension of a process provided for in Delegated Regulation (EU) 2019/1122 that impacts the auction calendars;

• (f) allowances remaining in the reserve for new entrants provided for in Article 10a(7) of Directive 2003/87/EC and allowances not allocated pursuant to Article 10c and Article 10ca of that Directive;

• (g) a unilateral inclusion of additional activities, greenhouse gases or sectors pursuant to Article 24 or Article 30j of Directive 2003/87/EC;

• (h) a measure adopted pursuant to Article 29a or Article 30h of Directive 2003/87/EC;

• (i) the entry into force of amendments to this Regulation or to Directive 2003/87/EC;

• (j) changes to the appointed auctioneer(s) pursuant to Article 22(1) or withholding of allowances from the auctions pursuant to Article 22(4);

• (k) the necessity for an auction platform to avoid conducting an auction in breach of provisions laid down in this Regulation or in Directive 2003/87/EC;

• (l) adjustments necessary pursuant to Articles 1 and 1a of Decision (EU) 2015/1814;

• (m) a cancellation of allowances pursuant to Article 12(4) of Directive 2003/87/EC;

• (n) adjustments necessary pursuant to Article 10a(9) of Directive 2003/87/EC;

• (o) adjustments necessary pursuant to Article 10e of Directive 2003/87/EC;

• (p) adjustments necessary pursuant to Article 30d or Article 30e(3) of Directive 2003/87/EC;

• (q) adjustments of the volume of allowances pursuant to Article 13(7).

CHAPTER IV ACCESS TO AUCTIONS

Article 15

Persons who may submit bids directly in an auction

Only a person who is eligible to apply for admission to bid pursuant to Article 18 and is admitted to bid pursuant to Articles 19 and 20 may submit bids directly in an auction.

Article 16

Means of access

Article 17

Training and helpline

An auction platform shall offer a practical web-based training module on the conduct of its auction process, including guidance on how to complete and submit any forms and a simulation of how to bid in an auction. It shall also make available a helpline service accessible by telephone and electronic mail at least during the working hours of each trading day.

Article 18

Persons eligible to apply for admission to bid

• (a) an operator, an aircraft operator, a shipping company or a regulated entity having an operator account in the Union Registry which is opened in accordance with Delegated Regulation (EU) 2019/1122, bidding on its own account, including any parent undertaking, subsidiary undertaking or affiliate undertaking forming part of the same group of undertakings as the operator, the aircraft operator, the shipping company or the regulated entity;

• (b) investment firms authorised under Directive 2014/65/EU bidding on their own account or on behalf of their clients;

• (c) credit institutions authorised under Directive 2013/36/EU of the European Parliament and of the Council ([^E0008]) bidding on their own account or on behalf of their clients;

• (d) business groupings of persons listed in point (a) bidding on their own account and acting as an agent on behalf of their members;

• (e) public bodies or state-owned entities of the Member States that control any of the persons listed in point (a).

Operators, aircraft operators and shipping companies may only participate in the auctions of allowances referred to in Article 10 and 11, whereas regulated entities may participate only in the auctions referred to in Article 13, including when they use the services of entities referred to in paragraph 1, points (b) to (e), to bid on their behalf.

• (a) their clients are eligible persons to apply for admission to bid directly pursuant to paragraphs 1 or 2;

• (b) they have, or will have in good time before the opening of the bidding window, adequate internal processes, procedures and contractual agreements necessary to:
• (i) enable them to process bids from their clients including submission of bids, collection of payment and transfer of allowances;
• (ii) prevent the disclosure of confidential information from the part of their business that is responsible for receiving, preparing and submitting bids on behalf of their clients to the part of their business that is responsible for preparing and submitting bids on their own account;
• (iii) ensure that their clients who are themselves bidding on behalf of their own clients in the auctions comply with the requirements set out in Article 19(2) and in this paragraph and that they require the same of their clients. Where there are further clients down the chain that are themselves bidding on behalf of their own clients, the directly preceding client shall require compliance with these requirements from the following client down the chain.

The auction platform concerned shall be able to rely on checks carried out by the persons referred to in the first subparagraph of this paragraph, their clients, or the clients of their clients as provided for in this paragraph.

Persons referred to in the first subparagraph of this paragraph shall be able to demonstrate to the auction platform, upon its request pursuant to Article 20(5), point (d), that the conditions set out in the first subparagraph of this paragraph, points (a) and (b), are fulfilled.

• (a) the auctioneer;

• (b) the auction platform including any clearing system and any settlement system connected to it;

• (c) persons who are in a position to exercise, directly or indirectly, significant influence over the management of the persons referred to in points (a) and (b);

• (d) persons working for persons referred to in points (a) and (b).

Article 19

Requirements for admission to bid

• (a) the requirements for admission of the member or participant to trade allowances on the secondary market organised by the auction platform are no less stringent than those set out in paragraph 2;

• (b) the auction platform receives any additional information necessary to verify the fulfilment of any requirements referred to in paragraph 2 that have not been previously verified.

• (a) are established in the Union, or are an operator, an aircraft operator, a shipping company or a regulated entity;

• (b) hold a nominated Union Registry account;

• (c) hold a nominated bank account;

• (d) appoint at least one bidder’s representative as referred to in Article 6(3), second subparagraph;

• (e) satisfy the auction platform concerned, in line with applicable customer due diligence measures, as to their identity, the identity of their beneficial owners, integrity, business and trading profile having regard to the means of establishing the relationship with the bidder, the type of bidder, the nature of the auctioned product, the size of prospective bids and the means of payment and delivery;

• (f) satisfy the auction platform concerned of their financial standing, in particular, that they are able to meet their financial commitments and current liabilities as they fall due;

• (g) have in place, or are able to put in place when requested, the internal processes, procedures and contractual agreements necessary to give effect to a maximum bid-size imposed pursuant to Article 48;

• (h) fulfil the requirements set out in Article 40(1).

Article 20

Submission and processing of applications for admission to bid

By way of derogation from the first subparagraph, members of or participants in the secondary market organised by the auction platform concerned who fulfil the requirements set out in Article 19(1) shall be admitted to bid without applying to the auction platform concerned for admission to bid.

• (a) to comply with requests made by the auction platform for additional information or clarification or substantiation of information provided;

• (b) to provide oral explanations following an invitation made by the auction platform to interview any representative of the applicant;

• (c) to allow investigations or verifications requested by the auction platform, including on-site visits or spot-checks at the applicant’s business premises;

• (d) to comply with requests made by the auction platform for any information required from the applicant, the clients of an applicant or, where applicable, the clients of their clients as provided for in Article 18(3);

• (e) to comply with requests made by the auction platform for any information required to check compliance with the requirements set out in Article 19(2).

The auction platform concerned may:

• (a) grant unconditional admission to bid in its auctions for a period not exceeding the term of its appointment, including any extension or renewal of that appointment;

• (b) grant conditional admission to bid in its auctions for a period not exceeding the term of its appointment, subject to fulfilment of certain specified conditions by a given date, which it shall duly verify;

• (c) refuse to grant admission to bid in its auctions.

Article 21

Refusal, revocation or suspension of an admission to bid

• (a) is not eligible to apply for admission to bid under Article 18(1) or (2);

• (b) does not meet the requirements set out in Articles 18 and 19, and, where applicable, Article 20; or

• (c) is wilfully or repeatedly in breach of this Regulation, the terms and conditions of the admission to bid in its auctions or any other related instructions or agreements.

In case of suspicions referred to in the first subparagraph, the auction platform concerned shall report to the Financial Intelligence Unit referred to in Article 32 of Directive (EU) 2015/849 (‘FIU’) in accordance with Article 46(2) of this Regulation.

• (a) who is negligently in breach of this Regulation, of the terms and conditions of the admission to bid in its auctions or of any other related instructions or agreements;

• (b) who has otherwise behaved in a manner that is prejudicial to the orderly or efficient conduct of an auction; or

• (c) who is referred to in Article 18(1), point (b) or (c), or Article 18(2) and has not bid in any auction during the preceding 220 trading days.

• (a) grant or reinstate admission to bid with effect from a given date;

• (b) grant conditional admission to bid or conditional reinstatement of the admission to bid subject to fulfilment of certain specified conditions by a given date, which it shall duly verify; or

• (c) confirm the refusal to grant admission to bid, or the revocation or suspension of the admission to bid with effect from a given date.

The auction platform shall notify the person in question of its decision under the first subparagraph, points (a), (b) and (c).

• (a) is orderly;

• (b) does not prejudice the interests of their clients or interfere with the efficient functioning of the auctions;

• (c) does not affect their obligations to comply with any payment provisions or any other related instructions or agreements;

• (d) does not compromise their obligations regarding the protection of confidential information set out in Article 18(3), point (b)(ii), which shall remain in force for 20 years following their removal from the auctions.

The refusal, revocation and suspension referred to in paragraphs 1, 2 and 3 shall specify any measures needed to comply with this paragraph and the auction platform shall verify compliance with such measures.

CHAPTER V APPOINTMENT OF THE AUCTIONEER AND ITS TASKS

Article 22

Appointment of the auctioneer

Article 23

The auctioneer’s tasks

The auctioneer shall carry out the following tasks:

• (a) auctioning of the volume of allowances to be auctioned by each Member State appointing it or for any fund or facility which is to be a recipient of the auction proceeds pursuant to Union law;

• (b) receipt of the auction proceeds due to each Member State appointing it or to any fund or facility referred to under point (a);

• (c) disbursement of the auction proceeds due to each Member State appointing it or to any fund or facility referred to under point (a).

CHAPTER VI AUCTIONING OF ALLOWANCES FOR FUNDS AND CANCELLATION OF ALLOWANCES

Article 24

Allowances to be auctioned for the Innovation Fund, the Modernisation Fund, the Recovery and Resilience Facility and the Social Climate Fund

Article 25

Procedure for cancellation of allowances

The Member State concerned shall notify to the Commission at the latest by 31 May of a given year the exact number of allowances to be cancelled in the period between 1 September and 31 December of that year. If the total volume of allowances to be cancelled in that period exceeds 5 million allowances, that volume shall be spread over the period between 1 September of that year and 31 August of the following year. The Member State concerned shall make its first notification under this subparagraph at the latest two years after the notification under subparagraph one.

CHAPTER VII APPOINTMENT OF AND SERVICES PROVIDED BY THE COMMON AUCTION PLATFORM

Article 26

Appointment of a common auction platform

A Member State that decides pursuant to Article 29(4) not to participate in the joint action pursuant to this Article but to appoint its own auction platform may be given observer status under terms and conditions agreed in the joint procurement agreement between the Member States participating in the joint action and the Commission, subject to any applicable Union public procurement rules.

Article 27

Services provided to the Member States by the common auction platform

• (a) providing access to the auctions, pursuant to Articles 15 to 21, including the provision and maintenance of the necessary web-based electronic interfaces and websites;

• (b) conducting the auctions in accordance with Articles 4 to 7;

• (c) managing the auction calendar in accordance with Articles 8 to 14;

• (d) announcing and notifying the results of an auction, pursuant to Article 52;

• (e) providing, or ensuring the provision of, the requisite clearing system or settlement system needed for:
• (i) the handling of payments made by successful bidders or their successors in title and distribution of the proceeds of the auctions to the auctioneer, pursuant to Articles 35 and 36;
• (ii) delivering the auctioned allowances to successful bidders or their successors in title, pursuant to Articles 37, 38 and 39;
• (iii) managing collateral, including any margining, provided by the auctioneer or bidders, pursuant to Articles 40 and 41;

• (f) surveying the auctions, notifying suspicions of money laundering, terrorist financing, criminal activity or market abuse, administering any required remedial measures or sanctions including the provision of an extra-judicial dispute resolution mechanism pursuant to Articles 45 to 50 and Article 55(1);

• (g) reporting pursuant to Article 34.

Article 28

Services provided to the Commission by the common auction platform

The common auction platform shall provide the Commission with technical support services with respect to the Commission’s work relating to the following:

• (a) coordination of the auction calendar with opt-out auction platforms listed in Annex III;

• (b) information relating to the conduct of the auctions pursuant to Article 44;

• (c) reports pursuant to Article 10(4), third subparagraph, and Article 10(5) of Directive 2003/87/EC;

• (d) review of this Regulation, Directive 2003/87/EC or the delegated acts adopted pursuant to Article 19(3) of that Directive which has an impact on the functioning of the carbon market, including the implementation of the auctions;

• (e) any other joint action relating to the functioning of the carbon market, including the implementation of the auctions agreed between the Commission and the Member States participating in the joint action.

CHAPTER VIII APPOINTMENT AND TASKS OF OPT-OUT AUCTION PLATFORMS

Article 29

Appointment of opt-out auction platforms

The period of appointment of an opt-out auction platform referred to in paragraph 1 shall be no longer than 3 years renewable for no more than a further period of 2 years.

The appointment of an opt-out auction platform shall not be effective before the entry into force of the listing of the opt-out auction platform concerned in Annex III, as provided for in paragraph 6.

• (a) the identity of the auction platform it proposes to appoint;

• (b) the detailed operative rules that are to govern the auction process to be conducted by the auction platform it proposes to appoint, including the contractual provisions concerning the appointment of the auction platform and any clearing system and settlement system connected to the proposed auction platform, stipulating the terms and conditions governing the structure and level of fees, collateral management, payment and delivery;

• (c) the auctioned product and any information necessary for the Commission to assess whether the envisaged auction calendar is compatible with any prevailing or envisaged auction calendar of the common auction platform, as well as any other auction calendars proposed by other Member States having appointed an opt-out auction platform;

• (d) the detailed rules and conditions on surveying and supervising the auctions to which its proposed auction platform shall be subject pursuant to Article 33(4), (5) and (6) as well as the detailed rules protecting against money laundering, terrorist financing, criminal activity or market abuse, including any remedial measures or sanctions;

• (e) the detailed measures put in place to comply with Article 22(3) and Article 32 regarding the appointment of the auctioneer.

In case a Member State having appointed an opt-out auction platform referred to in paragraph 1 decides to reappoint the same auction platform under the same conditions and obligations as per the listing provided for in the first subparagraph, that listing shall continue to be valid where that Member State and the Commission confirm that the relevant requirements of this Regulation and the objectives of Article 10(4) of Directive 2003/87/EC are satisfied. To this end, the Member State shall provide a notification containing the information referred to in paragraph 5 to the Commission and inform the other Member States of the reappointment. The Commission shall inform the public about the extended validity of the listing.

In the absence of any listing provided for in the first subparagraph, a Member State that chooses to appoint an opt-out auction platform shall use the common auction platforms to auction its share of allowances that would have otherwise been auctioned on the opt-out auction platform to be appointed in the period until the expiry of 3 months after the entry into force of the eventual listing provided for in the first subparagraph.

A Member State that chooses to appoint an opt-out auction platform pursuant to paragraph 1 of this Article may nevertheless participate in the joint action for the sole purpose of being able to make use of the common auction platform as provided in the third subparagraph. Such participation shall take place in accordance with the provisions of Article 26(5), second subparagraph, and subject to the terms and conditions of the joint procurement agreement.

The volume of allowances that were scheduled to be auctioned on an opt-out auction platform shall be spread evenly over the auctions conducted by the relevant common auction platform.

Article 30

Tasks of opt-out auction platforms

An opt-out auction platform shall carry out the same tasks as the common auction platform, as provided for in Article 27, except managing the auction calendar as referred to in Article 27(1), point (c), and it shall submit the exit strategy referred to in Article 27(3) to the appointing Member State.

The provisions provided for in Article 8(1), (2), (3) and (5), first subparagraph, and Articles 9, 10, 12, 14 and 31 shall apply to the opt-out auction platforms.

Article 31

Auction calendar for opt-out auction platforms

From 1 January 2025, provisions of paragraph 1 of this Article applying to allowances referred to in Article 10 shall also apply to allowances referred to in Article 11.