Germany announces emissions auction plans

BERLIN, May 27 (Reuters) - The German government announced plans on Wednesday to start auctioning off 40 million carbon emissions rights each year from 2010 for a three-year period.

"The auction is a further step to improve the efficiency of the traded emissions market," said Environment Minister Sigmar Gabriel in a statement after the cabinet agreed the measure, which still has to be passed through parliament.

The government has so far awarded for free most of the certificates to polluting industries, which under the European Union scheme must cover their CO2 output with certificates.

The rights for 40 million tonnes of CO2 correspond to about 10 percent of the total amount of certificates to be awarded in Germany through 2012.

Power companies, which are among the heaviest carbon polluters, have been passing some of the costs to consumers.

The auction would raise about 600 million euros ($836.6 million) per year based on current prices of 15 euros per tonne for the government. (Writing by Erik Kirschbaum; editing by James Jukwey)