Isra-Mart srl:European Commission moves to beef up carbon trading security

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Isra-Mart srl news:

The European Commission has today released long-awaited details of how it plans to bolster online security across the carbon market in the wake of last month's cyber attacks on national registries.

Connie Hedegaard, European Commissioner for Climate Action who will today chair a meeting of the EU Climate Change Committee convened to discuss the proposals, said that the plan would see member states take immediate steps to enhance security.

"The Commission has identified a range of actions that Member State can already take in the short term to further improve security for example by regularly reviewing security plans, by reinforcing registry account policies and identity checks, by training registry users etc," she said in a statement. "For the medium and long term we reinforce efforts to identify solutions in cooperation both with Member States and through a regular dialogue with stakeholders."

The Commission is recommending that member states set up a formal process for regularly reviewing registry security, strengthen checks regarding the opening of new registry accounts and review existing account holders, improve processes to notify other registries in the event of suspicious online activity, enhance security training for registry users, and complete the roll out of new VAT rules designed to block carousel fraud in the carbon market.

It said that in addition to these short term measures, the Commission will soon propose an overhaul of EU registry regulations to strengthen the legal powers available to the authorities and implement a public consultation on the oversight regime for the EU carbon market.

It also confirmed that it will hold a meeting with stakeholders about current security measures and the status of the estimated £28m stolen last month, which is expected to discuss what to do with the stolen allowances.

The Commission has been widely criticised by carbon traders in recent months for failing to act quickly enough to bolster security and distribute lists showing which carbon credits were stolen.

On 19 January the Commission closed all carbon registries across Europe, effectively suspending the carbon spot market following cyber thefts from a number of registries.

A number of registries have since met new EU security standards allowing them to re-open, but the majority of registries remain close and transaction volumes have been sluggish as traders express fears that they could end up inadvertently purchasing stolen credits.

It remains to be seen if the new proposals satisfy carbon traders and UK ministers, who last week called upon the commission to ensure registry security standards at least match those available from online banks.