Isra-Mart srl:Updated: Czechs ask EU to stop stolen carbon credits re-entering market

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The Czech authorities have identified nearly 1.36 million stolen carbon allowances in the UK, Estonia and Germany and requested the European Commission help prevent them re-entering the carbon market.

Jiri Stastny, director of OTE, which manages the Czech carbon registry, told Bloomberg today that his company has asked the commission to help ensure the stolen credits are blocked when national registries reopen and spot trading restarts, potentially from next week.

"If they don't find a way to freeze those permits, they will be on the market as soon as the registries reopen and trading resumes," Statsny warned. "We are voluntarily co-operating with other countries, but we need assistance from the Commission."

The EU was forced to freeze spot-trading across every one of the 27 registries two weeks ago, after Czech firm Blackstone Global Ventures said 475,000 emissions allowances had been stolen from its national registry.

Last week, CEZ energy group then said it had detected two unauthorised transfers, totalling 700,000 of its emission allowances, which are thought to be linked to the initial cyber attack.

EU plans to start a phased reactivation of the markets last Wednesday failed, and the commission has now called on all member states to file independent reports proving their registries meet minimum security standards.

OTE has predicted the Czech registry will remain shut for at least six weeks, while it focuses on tracing all the stolen allowances, and returning them to the original account holders. It has published the serial numbers of identified stolen allowances on its website.

In related news, European Commission sources told news agency Reuters that the first wave of registries will open on either Friday or Monday. However, fears remain that some registries could remain shut for several more weeks.

Meanwhile, a report by analyst firm Climate Policy Initiative based on interviews with 800 manufacturing firms warned that the EU would have to tighten the emissions cap in its emissions trading scheme from 2013 onwards if it is to drive sufficient levels of investment in low-carbon technology.