January 19, 2011 / 12:36 PM / 9 years ago

UPDATE 2-EU halts carbon market as permits feared stolen

* EU suspends nearly all transactions in EU ETS

* BlueNext suspended all carbon trading from 1600 GMT

* Czech, Estonia, Greece and Poland join Austria

(Updates throughout)

By Nina Chestney and Pete Harrison

LONDON/BRUSSELS, Jan 19 (Reuters) - The European Commission on Wednesday 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 on Wednesday, 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 CFI2Zc1 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. [ID:nLDE6BK0ZI]


On Wednesday a market participant told Reuters 475,000 European Union allowances (EUAs) had vanished from its account in the Czech Republic. [ID:nLDE70I0HF]

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. [ID:nLDE70H0IP]

Registries have been on alert since 1.6 million carbon permits went missing from the Romanian registry account of cement-maker Holcim HOLN.VX in November. [ID:nLDE6AT1XP]

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. [ID:nLDE6AT1XP] (Editing by Anthony Barker)

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