Update on transitional measure: EU ETS registry system
Following the suspensions of transactions, except for allocation and surrender of allowances, in all EU ETS national registries at least until 26 January 2011, announced on 19 January 2011, significant progress has been made in recent days.
On Friday, Member States have unanimously endorsed the action taken by the European Commission. On Monday, agreement has been reached on guidance for the minimum requirements that each national registry has to fulfill in order to resume normal operations.
This guidance has been distributed to the competent authorities. Each Member State has been asked to urgently provide the European Commission with an independent report confirming that the minimum security requirements have been put in place.
The European Commission is now awaiting these reports from Member States before national registries are fully re-activated. The first reports are expected to be submitted in the coming days.
The European Commission will continue to provide updates and will give a 24 hour lead-time ahead of the re-activation of national registries.
Questions and answers:
1. What minimum security requirements must national registries fulfill?
The minimum security requirements are confidential. These requirements are similar to those applied for other sensitive IT systems, like electronic banking systems. They are designed to ensure that every company holding allowances in a national registry has an adequate level of protection that the allowances are secure in this registry account.
2. Does the extended suspension not disturb the carbon market?
As the overwhelming part of the market is in futures, i.e. not for immediate delivery of allowances in registries, the practical implications of the suspension so far are limited to less than a fifth of the normal daily market volume. The suspension has furthermore had no effect on market prices.
3. How long will it take for all national registries to be operational again?
We can provide no estimate at this stage. In the first place this is in the hands of individual Member States now, which have to mobilize the resources to upgrade security where needed. In order to underline the importance of this issue, Commissioner Hedegaard has written to all Ministers to urge a swift follow-up and implementation of the guidance.
4. Will the European Commission disclose further details of unauthorized transfers of allowances, including serial numbers of affected allowances?
No, the European Commission has no authorization under relevant legislation to disclose such details nor has it been provided with complete information by affected national registries. While it does support national law enforcement agencies, the European Commission has no investigative powers to follow up the thefts.
5. What happens with allowances transferred with authorisation?
The recovery of any allowances which are claimed to have been transferred fraudulently has not been harmonised, and is therefore a matter for national law and national law enforcement authorities. Generally, allowances continue to represent legally valid and tradable compliance instruments, but national civil and criminal laws have different approaches.
