EU says spot carbon market may re-open next week

LONDON Fri Jan 28, 2011 6:05pm GMT

LONDON (Reuters) - The spot market in European Union emissions permits may re-open next week, the EU executive Commission said on Friday, but some carbon exchanges and registries doubted a re-start.

The uncertainty riled the carbon lobby which wants a definite deadline for the resumption of a market which normally trades about 40 million euros ($54.82 million) a day.

The spot market closed last week after the theft of pollution permits called EU allowances (EUAs) worth up to 30 million euros, and remained shut on Friday two days after an EU Commission deadline for a phased re-start.

National registries are the place where EUAs are electronically assigned to trading companies and polluters in the EU emissions trading scheme, the bloc's chief weapon against climate change.

"Current expectations are that the first national registries may be able to resume normal operations in the second half of the week beginning 31 January 2011," said an EU Commission statement late on Friday, confirming an earlier Reuters story.

The statement is unlikely to satisfy the International Emissions Trading Association, a carbon market lobby group, which earlier on Friday demanded "a deadline by which registries will be back online."

"While the safety of online banking has been scaled up, EU Member States have failed in protecting an 80 billion euro market, thereby undermining the EU's main tool to reach climate objectives," said Henry Derwent, head of IETA.

The Commission confirmed on Friday that it would give the carbon market 24 hours notice before reactivating a registry, after these had shown adequate security.

The spot market is about a quarter the size of the futures market in emissions permits, which continues to trade.

More details of the EU statement can be found here:

ec.europa.eu/environment/ets/

Registries and environment ministries in France, Britain, Germany, the Czech Republic and Estonia on Friday were unable to confirm on Friday any date for re-opening. "I cannot imagine that European registries will open next week," said Jiri Stastny, general director of the Czech carbon market operator OTE.

Meanwhile exchanges have previously said they were closed to spot trade. CE Futures Europe, which operates the largest emissions exchange, said on Thursday spot carbon trade would be suspended until February 7.

The Czech registry said on Thursday that its missing EUAs were in registries in Germany, Estonia and probably Britain. Those registries would not comment on Friday.

The liability for stolen EUAs remained uncertain, with the German registry saying stolen permits would still be valid. The Czech registry has published the list of missing permits at: here

(Additional reporting by: Mathilde Cru in Paris; David Mardiste in Estonia; Roman Gazdik in Prague; and Vera Eckert in Frankfurt; editing Will Hardy and Keiron Henderson)

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