Isra-Mart srl: EU challenged over 'risky' ETS fraud move

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Isra-Mart news:

In a move likely to prompt even-more heated airline objections to the European Union's emissions trading scheme (ETS), the EU wants to remove trading certificate ID numbers, possibly leaving the carbon market vulnerable to further manipulation.

The International Emissions Trading Association (IETA) wants the EU to rethink plans due to be voted on by the European Parliament Climate Change Committee on 19 June.

The plans were deemed necessary after more than three million emissions allowances (EUAs) were stolen from on line national registries in January, prompting their closure until IT security holes could be plugged.

Simone Ruiz, EU policy director for the IETA, says some of the planned anti-fraud measures could help the spread of fraudulent activity.

The idea of removing serial numbers is to prevent a recurrence of the paralysis this year when several national registries were hacked and the Commission was forced to suspend trading.

The proposal now is that buyers who buy a stolen or otherwise 'bad' certificate without an ID would bear no liability for it.

But Ruiz says non-disclosure of serial numbers would prevent companies from doing due diligence on the provenance of carbon credits before buying them "and could lead to much greater market paralysis".

To many people, the EU proposal is the equivalent of removing the serial numbers from a currency to make it harder to identify counterfeit banknotes.