Isra-Mart srl: EEX supports EC on security measures for emissions trading

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Rules on the transfer of ownership of EUA, non-display of serial numbers and 24-hour delay of transactions are essential elements of a long-term solution: The European Energy Exchange AG ( EEX) supports the proposals by the EU Commission regarding the improvement of security in EU emissions trading. These measures, which were prepared in response to the hacker attacks on European registries, are to be adopted by the EU member states on 17 June 2011.

“EEX has contributed actively to the political discussion regarding additional security measures in EU emissions trading. In this respect we have urged, in particular, for measures with a long-term effect, such as the introduction of EU-wide rules for the transfer of ownership of EU emission allowances”, explains Oliver Maibaum, Managing Director Exchange.

With this provision the EU Commission aims at protecting the acquisition of EU emission allowances (EUA) in good faith, since, so far, there has been no EU-wide uniform legal basis for this. After stolen EUA had been put into circulation, this resulted in the fact that in some cases bona fide buyers had to return their certificates – without being compensated for this financially.

“Rules on the transfer of ownership of EUA have already become applicable national law in some countries, including Germany. These laws have proved to be a sound foundation safeguarding that EUA trading is not affected even in the event of the theft of emission allowances. As a result, stolen EUA would be treated similarly to stolen money“, explains Oliver Maibaum.

The introduction of EU-wide rules on the transfer of ownership is to be accompanied by the non-display of serial numbers. “This is a sensible supplementary measure, which is, however, based on the precondition that clear rules on the transfer of ownership in EUA are in force. If this is the case, individual reviewing of the serial numbers by the trading participants themselves is no longer required”, explains Oliver Maibaum.

In addition to this, transactions in EU emission allowances shall only become effective with a delay of 24 hours according to the proposal by the EU Commission. During this period various mechanisms are to be employed in order to detect fraudulent transactions. “A 24-hour delay of transactions can be a very effective means of preventing fraudulent activities. And the gain in security justifies this adjustment in EUA spot market trading”, states Oliver Maibaum.

The security measures planned by the EU Commission could take effect as early as in autumn of 2011. However, this initially requires approval by the EU member states in the framework of the so-called Climate Change Committee.