Exchanges dismiss EUA serial numbers
Carbon exchanges disagree on the potential impact of the European Commission's proposal to hide the serial numbers of EU emissions allowances (EUAs) under the new rules, it emerged, as member states sent comments to the Commission on Friday.
While French platform BlueNext is opposed to the move, Germany's EEX indicated that it would start accepting contested EUAs again if new registry regulation makes serial numbers confidential, it said on Friday.
At present, the EEX does not use an outright blacklist to weed out stolen EUAs. Its clearing house monitors EUA submissions to its German registry account and flags up concerns, based on internal criteria, for relevant authorities.
The EEX welcomed the proposals to phase out EUA serial numbers, provided the new registry regulation also would streamline laws on the ownership of contested allowances − that is, allowances that have been stolen but then bought in good faith after a chain of transactions.
"It is not a clearing house genuine task to perform continuous checks on the individual units of emission allowances − this should not be considered as the long-term solution of choice," an EEX spokeswoman said.
"Despite the fact that clearing houses have introduced a tight screening of EUAs, these interim measures have not lead to a full recovery of trust in EUA markets. Therefore, the actual problem rather lies with the complex situation as to the ownership of EUAs," she added.
In contrast, a Bluenext spokesman said traders used serial numbers as a "risk management tool" and that removing them would dent market confidence.
The exchange had opened a "safe trading zone" at the beginning of May (see EDCM 4 May 2011), which verifies all allowances traded against their original source. The spokesman said the exchange would continue to provide protection in the event that serial numbers are phased out, as it did not rely on these numbers to verify the emissions traded.
A spokeswoman for the Intercontinental Exchange, which uses a blacklist of EUAs that cannot be used for delivery, did not comment on what the exchange would do if the new registry regulation hides serial numbers. MLDB
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