This report provides information on major design options related to the allocation of emissions allowances under the European Union Emissions Trading Scheme (the EU ETS, or "the Scheme"). The report was developed to assist the European Commission in the context of the review of options for the EU ETS after 2012, during the third and subsequent phases of the Scheme. The report covers topics related to allocation alternatives as well as several other issues. All of the material contained here was developed initially as a set of briefing notes for the Commission in 2007. The topics covered in the report are divided into two major categories: (1) assessment criteria and other general features, including cap-setting; and (2) allocation alternatives and issues specifically related to allocation.

The current plan is formulated on the basis of the Outline of the 11th Five-Year Plan for the Development of National Economy and Social Development and the Decision of the State Council on the Implementation of the Scientific Outlook on Development and Strengthening Environmental Protection [No.39 document of the State Council (2005)]. The current plan is an important part of the national 11th Five-Year Plan system, and aims at expounding the objectives, tasks, investments, and key policy measures in the field of environmental protection during the 11th Five-Year Plan period. The plan identifies the responsibilities and tasks of the government and the environmental protection departments at all levels, guiding and mobilizing the participation of enterprises and civil society and striving for environmentally friendly society.