Although the ‘over-allocation’ of allowances in EU-ETS has been noted as amajor cause of carbon price crash in phase I, few studies have analyzedquantitatively the issue of over-allocation in the formation of carbon prices. Inthis study, we employ new variables such as over-allocation and intra-phaseborrowing in our regression model along with other price determinants. Basedon the literature, the amount of over-allocation was calculated by comparingthe cap to Business-as-Usual emissions. The over-allocation, stock priceindex, clean dark/spark spread, the interaction term of stock price index andclean dark/spark spread, oil price, and extreme weathers are found to bestatistically significant.