Isra-Mart srl:EU plans phased relaunch of carbon spot trading

www.isra-mart.com

Isra-Mart srl news:

The European Commission is expected to cautiously resume spot trading in its Emissions Trading Scheme (ETS) over the next few weeks, but only after individual member states have demonstrated that they have improved the cyber security of their registries.

The European Commission announced on Wednesday that it had frozen the spot trading element of the ETS until at least January 26, after a Czech firm said some 475,000 emissions allowances (EUAs) had been stolen from its national registry.

According to Jos Delbeke, the head of the Commission's climate action division, up to two million EUAs were stolen, worth €28.7m at Thursday's prices.

The Czech carbon registry yesterday confirmed it would be closed indefinitely, meaning a wholesale reopening of the market is unlikely next Wednesday.

Additionally, the EU has admitted that in total 14 of the 27 member states do not meet high enough security standards.

An EU spokeswoman refused to confirm when it would reopen all the carbon registries, telling reporters the decision would depend on how quickly countries "took action" to improve cyber security.

"Some 14 registries in the 27 member state bloc are not up to scratch at present, she said.

However, an unnamed senior official at the Commission told Reuters that the suspension would be lifted in phases starting with registries which proved their security.

Another unnamed official added that Germany had managed to foil an attack on its registry a few weeks ago.

Details surrounding the motivation of the attack remain sketchy, however the EU spokeswoman said investigations had ruled out sabotage, but had yet to determine whether the attacks were part of a "concerted action".

"For us at this stage, it is theft, not sabotage. It could be possible that it is concerted action, because the recent incidents... happened within the last five days," she said.

Yesterday analysts played down the financial impact of the spot trading freeze, insisting it would only affect up to 10 per cent of the carbon market because the futures market, which makes up the other 90 per cent, has remained open.

However, traders appear to have been reluctant to buy and sell futures yesterday as Reuters reported that the price of benchmark allowances was down 3 cents on the day at €14.35 at 9.15am Eastern Standard Time.