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Recommendation 1: Relevant authorities should increase predictability and transparency in primary market decisions.
Recommendation 2: To foster fair, stable and competitive markets, relevant authorities in charge of primary market issuance should consider placing greater reliance on auctions over free allocation, where consistent with national authorities.
Recommendation 3: Relevant authorities should set the frequency of auctions in a manner that is predictable, transparent, and consistent with the size of the market.
Recommendation 4: When relevant authorities establish market stability mechanisms, any market intervention should be rule-based to allow for better predictability.
Recommendation 5: Relevant authorities should consider allowing a broad participation in primary markets, beyond compliance entities.
Recommendation 6: Relevant authorities should clarify the legal and regulatory classification of allowances in their jurisdiction.
Recommendation 7: Relevant authorities should encourage the scrutiny of auction performances.
Recommendation 8: Relevant authorities should consider establishing clear and robust frameworks for conducting market surveillance, overseeing of entities’ behavior in spot and derivatives carbon markets and ensuring appropriate enforcement.
Recommendation 9: Relevant authorities should ensure that the relevant market infrastructures (e.g., trading venues, auction platforms, central counterparties, registries) are robust and properly regulated.
Recommendation 10: Relevant authorities should encourage the development of standardized derivatives contracts.
Recommendation 11: Relevant authorities should consider public disclosures about aggregate positions, as well as periodic public reporting derived from regulatory data.
Recommendation 12: Relevant authorities should, within their mandates, set clear lines of responsibilities and cooperation between authorities in charge of compliance markets at the primary and secondary market level, including both environmental and financial agencies as appropriate and promoting regulatory coordination between these entities.