Austria Asks Sweden to Return Carbon Permits Worth $3.9 Million
Sweden is in talks with Austria about giving back European Union carbon allowances that may have been stolen in online attacks that have shaken confidence in an 80 billion-euro ($110 billion) market.
Austria requested the return of allowances valued at more than 25 million kronor ($3.9 million) that are now in an account controlled by Sweden, Ola Westberg, a spokesman for the Nordic country’s energy agency, said yesterday in an interview.
“A request from Austria has been made for their return,” Westberg said. “This is something that will have to be decided by the Swedish prosecutor’s office,” he said, declining to provide a timeframe for the ruling.
The EU announced the suspension on Jan. 19 of registries in 30 countries that track ownership of carbon dioxide allowances. That triggered a halt of spot trading in carbon, which accounted for about 12 percent of a total market, valued at about 80 billion euros last year, according to Prospex Research Ltd. and Bloomberg New Energy Finance. The halt may make the carbon market “untenable,” the European Federation of Energy Traders said yesterday, and Barclays Plc said it curtailed trading.
Trading of carbon futures continues despite the halt in spot markets. EU carbon permits for December delivery closed 0.8 percent lower yesterday at 14.86 euros on the ICE Europe Futures exchange in London. They traded earlier yesterday at 15.10 euros, the highest price in almost two months. Speculation that the spot ban will crimp supply is also fueling higher prices, OTC Europe LLP said yesterday.
‘Good Faith’
Sweden energy agency said in a Jan. 25 statement that it was holding permits with serial numbers matching those reported missing in Austria. “That the emission permits ended up in Sweden was probably a coincidence,” according to the statement.
“This type of criminality tries to make as many transactions as possible in a short period of time, hoping someone will buy them in good faith,” according to the statement. “We may have just been a transit country.”
Organized crime may be responsible for the theft of European Union emission allowances this month, and national authorities are working with Europol to catch the criminals, a top EU climate official said this week.
A series of computer-hacking attacks show some member states and firms neglected security rules, Jos Delbeke, director general for climate at the European Commission, said Jan. 28.
“Investigations are now being carried out by member states, and the Europol is involved,” he said. “They are looking everywhere where evidence can be found. Apart from Austria, Czech Republic and Greece, there were a few other countries where we had strong suspicions.” He declined to elaborate.
Recovering Lost Permits
While the commission estimated as many as 2 million permits valued at 30 million euros ($42 million) may be missing, some may be recovered. Greek cement company Halpys Building Materials SA was able to block thieves from reselling about 300,000 carbon dioxide permits that were stolen from its account on Jan. 18, Pagona Ligou, an Athens-based spokeswoman, said today.
“We have blocked the sale and the next step is to get the permits back,” she said. Halpys was informed on Jan. 18 that the carbon permits were missing, she said.
CO2 hackers in Greece have been traced and arrests will be announced in the next few days, The Wall Street Journal reported yesterday, citing unidentified people involved in the matter.
The Austrian registry announced on Jan. 21 that it tracked down 488,141 missing carbon credits in Sweden and Liechtenstein shortly after a Jan. 10 hacking attack, and authorities blocked them from use.
Unauthorized Trades
The EU suspended all registries in Europe after Blackstone Global Ventures, a trader based in the Czech city of Brno, informed national administrators on Jan. 19 that 475,000 allowances were missing from its account. Last week CEZ AS, the largest Czech power producer, said it lost 700,000 allowances in unauthorized transfers in the raids on the registry.
The allowances stolen from Blackstone went through accounts in national registries in Poland, Estonia and Liechtenstein, said Nikos Tornikidis, manager of Blackstone’s carbon portfolio.
Traders are seeking an agreement on compensation for buyers of permits that may have been stolen, Norton Rose LLP said.
“Many players would like some sort of compensation mechanism set up so that if they unwittingly buy stolen allowances, there is a mechanism by which they can return these to the authorities in exchange for replacement allowances or financial compensation,” Andrew Hedges, a partner at law firm Norton Rose in London, said in an e-mail today. “This is a serious issue for the market.”
To contact the reporter on this story: Johan Carlstrom in Stockholm at jcarlstrom@bloomberg.net
To contact the editor responsible for this story: Mike Anderson at manderson34@bloomberg.net
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