The European Commission, a carbon market regulator, has said that it will sign a contract by mid-October with the European Investment Bank (EIB) for the sale of carbon emission permits.

The European Commission and EIB are now ‘fine-tuning’ the agreement, Bloomberg reported citing Maria Kokkonen, a climate spokeswoman.

The regulator said that the EU will be providing as many as 300 million carbon allowances from the next phase of its emissions-trading system that starts in 2013, which could be used to finance less polluting, innovative technologies.

The EIB will sell the permits set aside in the new entrants reserve and the proceeds will be used to support carbon capture and storage and renewable energy projects.