Under Regional Greenhouse Gas Initiative Model Rules the Regulatory Agency of the RGGI (or its agent) records a CO2 allowance transfer by moving each CO2 allowance from the transferor account to the transferee account within 5 business days of receiving a CO2 allowance transfer.
Is this a right remedy for the EUETS recent weaknesses?
The contemplated registry security measures
ECCP stakeholder meeting on ETS registry security and stolen allowances scheduled for 15 March 2011 will seek to find the right answers to the issues of differentiation of account categories in ETS registries, potential disclosure of serial numbers of (allegedly) stolen allowances and whether to display serial numbers of allowances in ETS registries,
Another important topic tabled by the Commission is the contemplation of possible introduction of delivery delay mechanism in ETS registries. As the Commission recalled, current registry rules allow for the almost immediate transfer of allowances between registry accounts to facilitate the spot market in carbon allowances, while not all exchanges offering spot trading require this feature. The problem under consideration is a potential introducing in the forthcoming amendment of the Registries Regulation a delivery delay mechanism applicable in the single registry in the sense that ‘transfers of allowances between registry accounts are not executed immediately but after a certain time delay has expired’. The intention of the afore-mentioned change would be to increase the likelihood that fraudulent transfers of allowances can be stopped before execution and even in case of a fraudulent transfer the allowance can not be delivered further to a third party as rapidly as under current circumstances.
The answer whether to introduce a certain delay in effecting transfers of allowances from the registry accounts is not easy. It would be useful to consider this issue as well as the concrete time-limits for the said delay in a wider context of emission trading schemes functioning in the world.
Under Regional Greenhouse Gas Initiative Model Rules 12/31/08 (XX-7.2 Recordation) the Regulatory Agency of the RGGI (or its agent) records a CO2 allowance transfer by moving each CO2 allowance from the transferor account to the transferee account within 5 business days of receiving a CO2 allowance transfer (the prerequisites for recordation are that the transfer is correctly submitted under established rules and that the transferor account includes each CO2 allowance identified by serial number in the transfer).
Furthermore, under the point XX-7.3 of the said Model Rules the Regulatory Agency of the RGGI (or its agent) notifies each party to the transfer within 5 business days of recordation of a CO2 allowance transfer.
In the case of non-recordation authorized account representatives of both accounts subject to the transfer are notified within 10 business days of receipt by the Regulatory Agency of the RGGI (or its agent) of a CO2 allowance transfer (non-recordation occurs when the transfer fails to meet the requirements of the Model Rules). The said notification includes a decision not to record the transfer, and the reasons for such non-recordation.