EU Carbon Market Spot Trading Delayed - Officials
Date: 01-Mar-05
Country: BELGIUM
Author: Jeff Mason
The EU trading scheme allows industrial plants to buy or sell allowances to emit C02 -- essentially the right to pollute -- to reducing the output of the heat-trapping greenhouse gas that many scientists blame for causing global warming.
Forward trading in the carbon market has been going on for some time, and spot trading was supposed to have started on Monday, when member states were to have had registries containing plants' allowances on-line.
But only three countries have registries that are fully operational and linked to the EU's central database: Denmark, Finland, and the Netherlands.
The Commission has approved 21 countries' national allocation plans and its central database or transaction log has been on-line since the beginning of January.
But for spot trading to begin, the Commission must check that the states allocate the CO2 allowances according to the plans as they were approved.
"A member state who wants to put allowances in its registry accounts has to come to the Commission with a table of quantities in its allocation plan," said Peter Vis, acting head of the Commission's industrial emission unit.
"We do check that the amount of that plan as it then stands is as it should be after the Commission decision," he said. "We can't let the member states upload more allowances than we've approved."
DELAYS
Poland, Greece, Italy and the Czech Republic have not yet got the green light for their plans, and Britain is trying to increase the number of allocations its plants can use, but the Commission has declared such a move illegal.
Germany a week ago informed Brussels how it aims to hand out CO2 rights to nearly 2,000 plants taking part in the scheme but said it is still waiting for approval to start distribution.
"The release of the first tranche of emissions rights will be delayed despite the fact that Germany has completed all preparations for the start of the German emissions trading registry," the federal environment agency said.
"The reason is that the EU Commission has not completed the examination of the national allocation plans," it said.
The Commission said 10 states have tested their registries, but some -- including Germany -- must still submit technical information like back-up plans for Internet viruses, to prove their systems work.
"Until we have the complete set of information that's needed, we can't switch the registry on," said Olivia Hartridge, a Commission administrator.
"We would expect a reasonable number of additional registries to go on line in the next few weeks."
She said France, Britain, Germany, the Netherlands, Belgium, Sweden, Finland, Denmark, Ireland, and Slovenia had completed the necessary testing of their registries, which store the allowances that the companies can trade.
Despite the February 28 intended start date, Hartridge said the Commission and industry -- which is already keeping track of its C02 emissions -- were patient for spot trading to start as long as allocations were implemented correctly.
"Basically the market is pretty strong on a forward basis at the moment," she said. "It's all working. People just need a little more time."
(additional reporting by Nicholas Brautlecht in Frankfurt)