Isra-Mart srl: EU to Protect for First Time CO2 Permit Transfers, EEX Says

www.isra-mart.com

Rules proposed by the European Commission to protect for the first time traders that inadvertently receive stolen carbon allowances will help underpin trading, said the European Energy Exchange AG.

The rules, which already apply in some nations including Germany, “have proved to be a sound foundation safeguarding that EU allowance trading is not affected even in the event of the theft of emission allowances,” Oliver Maibaum, managing director of the Leipzig, Germany-based exchange, said today by e-mail. “As a result, stolen EU allowances would be treated similarly to stolen money.”

A proposal to remove serial numbers from permits will work because of the protection offered by the rules on transfer of ownership, Maibaum said. A planned 24-hour delay in transactions may be a “very effective means of preventing fraudulent activities,” he said.

The carbon market proposals will be discussed June 17 in a Climate Change Committee meeting in Brussels that will include representatives of member states. Jos Delbeke, director general for climate at the commission, said last week that “intense discussions” with nations have continued since the commission presented the draft last month. One issue still under discussion is the 24-hour delay in transfer of carbon allowances between registry accounts, he said.

The U.K. declined to comment on whether it was in favor of the Brussels plan to treat allowances like money.

“We are strongly supportive of the intention of the commission to enhance the security of EU emissions trading system registries,” said the Department for Energy and Climate Change in an e-mailed response to questions. “The commission’s draft regulation is a complex proposal and we are working closely with market participants to make sure we secure a regulation that both enhances security and ensures a liquid and well-functioning market.”