EU halts carbon market as permits feared stolen

LONDON/BRUSSELS, (Reuters) – The European Commission  today halted its emissions trading scheme (ETS), its  chief weapon against climate change, after allegations that  permits worth millions of euros had been stolen.
The Commission said the suspension of most transactions  would last until at least Jan. 26 and only the allocation and  surrender of carbon allowances would be allowed.
The move follows a decision by France’s BlueNext spot  emissions exchange to halt trade and several EU member states’  closure of their carbon registries after permits worth 6.7  million euros ($9.02 million) were allegedly stolen.
The Czech Republic, Greece, Estonia and Poland closed their  carbon trading registries earlier today, joining Austria.
BlueNext said in a note to its members that it suspended all  trade from 1600 GMT due to demands for action over the security  breach involving EU Allowances (EUAs).
“(…) There was strong demand to filter out the allegedly  stolen EUAs and place them into isolation,” the exchange said.
The benchmark EUA contract fell 21 cents to 14.41 euros a  tonne at 1646 GMT.
“All traders have left the market. This is serious,” an  emissions trader told Reuters.
In the last two years the EU ETS, which limits carbon  emissions by factories and power plants, has had to contend with  upsets including the re-sale of used carbon credits, a phishing  scam and continuing VAT fraud.
Today a market participant told Reuters 475,000  European Union allowances (EUAs) had vanished from its account  in the Czech Republic.
Prague-based Blackstone Global Ventures said it had reported  to the Czech authorities that the carbon permits were  unaccounted for in its Czech registry account.
“We are treating them as stolen,” Daniel Butler, the firm’s  broker told Reuters. “We do know that the first delivery point  for the EUAs was Estonia. After that we have no other  information.”
The European Commission confirmed that Greece had closed its  national registry, while Poland and Estonia registries said  theirs were also shut.
Austria’s registry is shut until further notice due to a  hacker attack.
Registries have been on alert since 1.6 million carbon  permits went missing from the Romanian registry account of  cement-maker Holcim in November.
A list of units missing from the Czech account, seen by  Reuters, show that some 13,100 EUAs match the serial numbers of  those reported missing by Holcim.
Registries were also targeted in February last year by  scammers who tried to gain access to carbon accounts through  email phishing. The Commission then adopted measures to reduce  the risk of unauthorised transactions and fraud.