The emission allowances (EUA) are either issued by the EU free of charge to companies subject to emissions trading as part of the allocation process or auctioned at a cost. Every company can participate in the auctions.
With the aim of establishing the auction principle as the basic allocation process, the free allocation has been gradually reduced since the beginning of emissions trading in 2005. In the meantime, more than 50% of the allowances are issued via auctions.
In principle, if a company cannot cover its demand for EUAs through free allocation, it must purchase the missing EUAs through auctions or the secondary market.

Once the emission allowances have been put into circulation by EU companies, they can be traded. Anyone, whether an individual or a company, who has opened an account in the EU registry can buy and sell EUAs, whether or not they are covered by the EU ETS.
Trading on the CO2 market can be carried out either directly between buyer and seller, or via intermediate stock exchanges or other intermediaries.
While all EUAs have the same characteristics and are therefore interchangeable, different EUA products are traded in the markets, which differ in terms of delivery time and payment.