Carbon market crisis: round-up of recent developments

This post provides a round-up of developments in the carbon market infrastructure since the crisis broke in January: the reopening of some registries; resumption of trading at some exchanges; and some legal and regulatory developments

Reopening of registries

4 February

Registries in France, Germany, the Netherlands, Portugal, Slovakia, Spain and the UK reopened.

24 February

Registries in Belgium, Estonia and Luxembourg reopened.

4 March

Registries in Bulgaria, Ireland and Norway reopened.

7 March

Registries in Austria and Poland reopened.

The other twelve EU registries remain closed, as is the Swiss registry.

 

Reopening of trading

BlueNext reopened spot trading on 4 Feb

EEX resumed normal spot trading with the reopening of the German registry on 4 February, but has created separate settlement accounts for the results of auctions and for secondary market trading.

NasdaqOMX Commodities Exchange (formerly Nord Pool) reopened for spot trading on 1 March. The Clearinghouse has introduced screening procedures and the delivery point has been changed from the Danish registry (which remains closed) to the UK registry.

Green Exchange remains closed for daily futures.

ICE Europe remains closed for daily futures and has published a list of EUAs, CERs and ERUs that will not be accepted by the clearing house in settlement of futures contracts.

Climex has discontinued trading in spot contracts.

 

Other developments

The legal status of the stolen units and the position of a company that unwittingly holds them remains unclear. IETA has called for clarification of the legal position in a paper published on 28 January.

A Commission spokesperson is reported as having confirmed that stolen units are still valid and can be used for compliance purposes. No definitive list has been published on the grounds that no cases have not been brought to court so no theft has yet been proven.

An Italian energy company is bringing a court case in Belgium to force the EU Commission to identify the companies known to be in possession of units stolen from the Italian company.

On 23 February the EU Commission outlined a series of actions to enhance registry security and combat fraud.

These are being discussed at a meeting with market participants on 15 March, focusing on:

– possible introduction of a delivery delay in registries to allow fraudulent transfers to caught

– possible differentiation of account categories in registries to with different risk charateristics

– whether serial numbers of units should be displayed in registries and the disclosure of (allegedly) stolen units

– market oversight of the carbon market.

 

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