Since 2005, the European Emissions Trading System has been limiting the CO2-emissions of energy intensive industries in Europe. In the third phase of the system, starting in 2013, a major part of the European Union Emission Allowances (EUAs) shall be auctioned (EC, 2009a). In principle, starting in 2013 the free allocation of EUAs shall be reduced to a share of 30 percent until 2020 and shall be discontinued completely in 2027. In the energy producing sector, the certificates will be auctioned entirely. Against this backdrop, the question arises how the earnings from the auctioning of certificates will be allocated. When it comes to the allocation of the earnings various distributive policy concerns have to be considered. Accordingly, the resource allocation must meet social, economic, climate, and technological policy requirements. Additionally, it must be guaranteed that the efficiency of the emissions trading system can be upheld and that there will be no negative interferences between the individual measures. With this project, we aimed at developing approaches for the national allocation of the earnings from the auctioning in the EU ETS of Germany. We evaluated these approaches taking economic, legal and distributive policy aspects into account. First, we wanted to identify possible approaches by reviewing theoretical and empirical literature. We also included debates and approaches of other EU member states. Second, we evaluated the different proposals from an economic and legal viewpoint. Finally, we derived concrete recommendations for action from our results.