EU Countries Back Emissions Trade Security Changes
Author: Nina Chestney
European Union countries have backed planned changes to emissions registry rules, aimed at increasing security after the theft of over 3 million carbon permits earlier this year, the EU Commission said on Friday.
"If the European Parliament and the Council do not raise objections, the Commission will adopt the proposed regulation after a three-month scrutiny period," the Commission said in a statement.
Carbon permits called EU Allowances (EUAs) are traded under the EU's emissions trading scheme. Over 3 million spot EUAs were allegedly stolen from EU national registries at the end of last year and beginning of this year in cyber attacks.
The Commission shut down the bloc's registries and several EU emissions exchanges temporarily halted spot trade.
Registries and most exchanges have since reopened but confidence and volumes have remained relatively low.
One of the planned security measures is the introduction of "out of band" authentication, whereby buyers and sellers must confirm transactions over two separate networks such as telephone and email.
Other measures include the introduction of a list of "trusted accounts", which are accounts that have passed two-person and identity checks, new account categories, as well as strengthened due diligence checks.
Also, authorities will be able to respond quicker to fraud, by delaying the completion of transactions, freezing allowances and by giving wider access to law enforcement authorities to confidential information, the Commission said.
The changes are designed to ensure that the market is less disrupted if fraud does occur.
"Allowances will be fully fungible for compensation claims, which means that an allowance can be substituted by any other allowance, if there were a legal claim," the Commission said.
In addition, the serial numbers of allowances will only be visible to relevant law enforcement authorities.
(Editing by Jason Neely)