BlueNext and its members want regulators to show "some
courage and commitment," said Francois-Xavier Saint-Macary ,
chief executive officer of BlueNext, the Paris-based exchange
owned by NYSE EuroNext that last year had the biggest share of
spot carbon trading. Under a plan the bourse proposed today,
members that may have unwittingly purchased allegedly stolen
permits would be required to establish an "isolation account,"
which would hold those permits and prevent trade until ownership
is settled, he said today on a call with reporters.
+------------------------------------------------------------------------------+
Hacking Attack Prompts Doubts About Security of EU Carbon Market
2011-01-20 12:28:47.887 GMT
By Ewa Krukowska and Mathew Carr
Jan. 20 (Bloomberg) -- Trading in European Union carbon
permits fell and the BlueNext SA exchange proposed "isolation
accounts" after an alleged hacking raised doubts about security
in the world's biggest emissions market.
The European Commission, the Brussels-based regulator,
suspended most operations yesterday at all 30 of the region's
greenhouse-gas emissions registries after a Czech firm reported
about 6.8 million euros of carbon allowances stolen. Replacing
national registries, now used to track emission allowances in
each member state, with a central clearinghouse will resolve the
"security problem" in the Emissions Trading System, Maria
Kokkonen, climate spokeswoman for the EU, said today.
"Security is the responsibility of the national member
states for their own registries," Kokkonen told reporters
today. "But we of course, as market regulator, have to act here
and remind member states to take measures."
Futures trading in December carbon allowances fell to a
pace of about 475,000 tons an hour as of 11 a.m. London time on
the ICE Futures Europe exchange in London, compared with
yesterday's 1.2 million tons an hour. Prices for EU futures,
which fell yesterday the most in a week, were little changed
today at 14.43 euros ($19.46) a ton.
BlueNext and its members want regulators to show "some
courage and commitment," said Francois-Xavier Saint-Macary,
chief executive officer of BlueNext, the Paris-based exchange
owned by NYSE EuroNext that last year had the biggest share of
spot carbon trading. Under a plan the bourse proposed today,
members that may have unwittingly purchased allegedly stolen
permits would be required to establish an "isolation account,"
which would hold those permits and prevent trade until ownership
is settled, he said today on a call with reporters.
'Safe Harbor'
BlueNext's "safe harbor" initiative, proposed after
consultation with members, calls for registries, police and
governments to distribute official lists of stolen permits and
credits, Saint-Macary said. BlueNext also proposed a European
Union-wide notice board to speed communication about thefts.
ICE Futures Europe in London, the biggest exchange for
carbon trading, yesterday suspended trading effective today
through Jan. 27 of its daily futures for EU contracts and United
Nations' overseen Certified Emission Reductions.
The International Emissions Trading Association said it's
"very concerned" about disruption to business following the
theft. It called for "speedy" action from the bloc's
regulator. "There are arguments, at least in the longer term,
that centralized EU decisions need to be taken on the status of
stolen certificates," according to the statement. Oversight is
currently administered by nations.
Detailed Explanation
The Geneva-based IETA is ready to help the European
Commission with the "identification of issues and solutions"
and expects that the EU regulator will be able quickly to
provide a more detailed explanation and propose further steps.
The halt of the registries, which track ownership of
allowances, will last at least until Jan. 26, according to the
commission. It said it will work with national authorities to
determine what "minimum" security measures need to be put in
place before the suspension of a registry can be lifted.
Blackstone Global Ventures, a trader based in Brno, Czech
Republic, lost 470,000 allowances yesterday, according to Daniel
Butler, the company's broker at Wallich & Matthes BV in Prague.
The reported theft followed at least two incidents in the
past months in which permits, used by more than 11,000 European
factories and power stations to lawfully emit carbon dioxide,
were stolen from accounts in attempts to profit from resale.
Hacker Attacks
In November, Romania's registry was accessed without
authorization, prompting a statement of regret from Jos Delbeke,
director general for the commission's climate department, which
supervises the carbon market. Last week the Austrian registry
blocked access to accounts after a hacker attack on January 10.
The European emissions trading system includes the EU's 27
member states as well as Norway, Iceland and Liechtenstein. It
was set up in 2005 as a cornerstone of the bloc's efforts to
tackle the heat waves, storms and floods that scientists have
linked to emissions of greenhouse gases.
According to EU law, the single registry for the
emissions-trading system has to be operational at the start of
2012 and work on this is continuing in the Brussels-based
commission, Peter Zapfel, head of policy co-ordination in the
climate department, said in November.
For Related News and Information:
Emission market news NI ECREDITS <GO>
Today's top energy stories ETOP <GO>
European power-markets home page EPWR <GO>
Sustainability, environmental indexes SEI <GO>
--With assistance from Catherine Airlie in London. Editors: Mike
Anderson, Alex Devine.
To contact the reporter on this story:
Ewa Krukowska in Brussels +32-2-237-4331 or
ekrukowska@bloomberg.net;
Mathew Carr in London at +44-20-7073-3531 or
m.carr@bloomberg.net
To contact the editor responsible for this story:
Stephen Voss at +44-20-7073-3520 or sev@bloomberg.net
