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The Emissions Trading Scheme puts a cap on emissions from around 12,000 installations throughout the EU, including the energy and heavy industrial sectors. These sectors are collectively 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.

"We want more auctioning in the future - and are already planning to auction 100% of the allowances needed by the power sector from 2013. This auction highlights the importance of using the market to drive down emissions and create incentives for the development of low carbon technology."

The Exchequer Secretary to the Treasury, Angela Eagle, said:
"Countries all around the world are dealing with the challenge of a global economic slowdown, but today's auction demonstrates that we will not be distracted from our fight against climate change. Today, the UK has shown it is at the forefront of environmental action by holding the first auction of carbon allowances anywhere in Europe.

"Based on the principle that the polluter pays, these auctions will develop the market for carbon trading and provide the right long-term incentives for companies across Europe to invest in solutions to reduce emissions."

During 2009 the Government plans to auction 25 million allowances. Dates for future auctions will be announced in due course.