EU May Extend Restrictions on Some Member Emissions-Trading Registries

The European Union may prevent some national registries in its emissions-trading program from resuming full operations on Jan. 26, extending a halt imposed last week after a series of computer-hacking attacks.

The European Commission, the Brussels-based EU executive, blocked most operations at Europe’s 30 registries for greenhouse-gas emissions on Jan. 19. The commission, which estimates as many as 2 million permits valued at 29 million euros ($39 million) may be missing in Austria, the Czech Republic and Greece, last week urged member states to take additional steps to protect the registries.

The commission told the European Parliament’s environment committee that national registries “would need to prove the integrity of their security measures” before they return to normal, the committee said today. During the suspension, all transactions except for allocation and surrender of allowances are blocked.

“It anticipated that several member states would be unable to do so before the possible reopening of the market this Wednesday,” the committee said in a statement after a hearing in Brussels today.

The Czech registry said last week about 1 million permits may be missing and that more than one company had been affected in hacking attack. Blackstone Global Ventures, a trader based in the Czech city of Brno, informed national administrators on Jan. 19 that it had lost 475,000 allowances the previous day.

Tracked Down

The Austrian registry tracked down 488,141 missing carbon credits in Sweden and Liechtenstein shortly after a Jan. 10 hacking attack and authorities blocked them from use, according to a statement on the registry’s website.

“The cybercriminal attack did not result in losses to any holder of personal or operator accounts,” the registry said in the statement dated Jan. 21. “The illegally transferred emission certificates have been frozen and reported to the Austrian authorities (Federal Criminal Agency), who have requested that certificates be transferred back to Vienna.”

The suspension of registries, which track permit ownership, halted spot trading in the world’s largest carbon market and triggered calls from the International Emissions Trading Association for an early response to the disappearance of permits in the Czech Republic, Austria and Romania in recent months.

European Climate Commissioner Connie Hedegaard said on Jan. 21 that EU members understood the need to ensure security before their registries could resume operations.

Trading Volume

EU allowances for delivery in December 2011, which didn’t face trading restrictions, rose 0.8 percent today to 14.59 euros on the ICE Futures Europe exchange in London.

The European market, founded in 2005 and intended as a model for a future global carbon program, had a trading volume of 80 billion euros last year, according to Bloomberg New Energy Finance. The region’s cap-and-trade system covers the 27 nations of the EU as well as Iceland, Liechtenstein and Norway.

The cap-and-trade system prices carbon by setting limits on the amount of emissions polluters can produce. Those producing more than the limit must buy permits to offset their emissions, allowing those that emit less to sell their balance in the market. While the system is set to have a central clearinghouse starting in 2013, so-called national registries are currently responsible for keeping tabs on permits.

To contact the reporter on this story: Ewa Krukowska in Brussels ekrukowska@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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