Brussels has suspended the exchange of EU carbon permits for a week after security breaches, halting spot trade in EUAs. The European Commission, the regulator of the European Union’s emissions trading scheme (EU-ETS), has suspended transactions in all national registries until at least January 26. The action – from 7pm January 19 - has been prompted by online security breaches in national registries of some EU countries. Both the Czech Republic and Austria have been victims with hackers apparently gaining access to their electronic registries and stealing significant volumes of EUA carbon emissions permits.
The move to halt the transfer of electronic EUA permits between registries effectively stops spot trading, which requires immediate settlement. EUA futures trading, where exchange and settlement does not occur until a prescribed future time is not directly affected at this stage.
The latest security problems come on top a number of issues over the robustness of the market that have arisen over the past two years including fraud over VAT on EUA sales, and the re-sale of used CER carbon credits in the EU market.
Reuters reports that the Czech Republic, Austria, Greece, Estonia and Poland have now all shut down access to their carbon trading registries, the latter three as a precaution. Also halting trade was the BlueNext exchange, the leading spot trade marketplace, as it tried to track any stolen permits in circulation. As for the impact on market confidence, Emmanuel Fages, analyst at Societe Generale/Orbeo, said there could be some psychological effect on prices. “But I do not see the market melting down in terms of prices unless everyone liquidates their positions through panic," he told Reuters.
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