The prohibition against resource shuffling is not currently introduced in EU ETS climate legislation. But for how long?



How many authorisations are necessary to make emissions allowances transfer request fraud-resistant and, concurrently, non-bureaucratic?



All first deliverers of the electricity in the EU must be treated equally, whether they are in-Union generators or electricity importers.




The new framework for central securities depositories (CSD) provides for the rule that without prejudice to the corporate law under which the securities are constituted, an issuer will have the right to arrange for its securities to be recorded in any CSD established in any Member State. A CSD conducting business in different jurisdictions is obliged, however, to identify and mitigate the risks arising from any potential conflicts of laws across jurisdictions.




The opinion of the ITRE Committee highlights the fact that physically settled forward products in MiFID II EC proposal are classified as financial instruments. The essence of the recent ITRE proposal is, however, to explicitly exclude products that can be physically settled and that are entered into for commercial purposes and do not display the characteristics of other derivative financial instruments.



It appears that the regulatory work has stopped half way. Since the critical determination whether a trade has been performed in good faith would still be done in accordance with national laws it could be presumed that problems with enforcement of property rights will persist.



It could presumably contribute to strengthening the liquidity in the emission allowances market and prop-up ailing prices if the safeguards provided for in the Financial Collateral Directive were extended to carbon instruments.

Also emitters could gain advantage from such a legislative action.



May 1, 2012 – overlooking this date means heavy loses for California potential opt-in entities wishing to receive free allocation of 2013-vintage allowances in 2012.


The EUETS covered participants don’t have this problem because in the EUETS opt-in framework does not exist.


Is there a global price for carbon? Today the answer seems obvious - it isn't.
Moreover, throughout the world there are radically divergent approaches to the issue of the very existence of the need for carbon pricing, the concrete price-setting mechanisms not to mention.
In order to outline the issue posed in the title there should be considered in the  first place the regulatory mechanisms for carbon floor and ceilings available in currently deployed schemes in California and Australia as the opposite to the entirely - up to now - market-based system functioning in the EU.

There are arguments that EUAs should be classified as "property" and "intangible property" at common law.


It seems that before the amendment of the Registry Regulation rules as well as after such change the transfer of EUAs in itself may not be regarded as the sufficient proof of ownership of allowances sold. It is notably true when the allowances sold were transferred from an account other than the account of the seller.

A tool for assessing risks inherent in draft Commission Guidelines with respect to aid to undertakings in sectors and subsectors deemed to be exposed to a significant risk of carbon leakage due to EU ETS allowance costs passed on in electricity prices (aid for indirect emission costs).

The important clarification regarding Article 10c of the Directive 2003/87/EC is that the market value of allowances allocated free of charge must not exceed the total costs for investments undertaken by the recipient of free allowances (at the level of company groups). If the total investment costs are lower than the market value of the allowances, the recipients of free allowances will be obliged to transfer the difference to a mechanism that will finance other investments eligible under the National Investment Plan.
The issue of State aid regime could be decisive for potential free allocations and consequently highly influential with respect to market price tendencies for emission allowances.


New provisions of the registry regulation entered at last into force. They significantly reduce the risk of questioning the legal title to emission allowances transferred into the buyer account.


This protection was so far considerably weaker and the Union legal framework did not protect these transactions to the sufficient extent, which was reflected in legal problems originated in thefts of allowances from registries, which, in turn, subsequently shrank the liquidity of the EU ETS spot market.


The Regulation on the Union Registry (which also amended the provisions on registry rules applying already in the second trading period) will in that regard play a fundamental role with respect to the trading in emission allowances.



Recent communication from the European Commission contains invaluable directions for project developers, emission credits investors and, last but not least, installation’s operators.



Even though the EIB declares that it does not take any view on EUA’s prices and does not have a price target for the monetisation of the EUAs and the main objective of the monetisation is to minimise any impact on the EUA market it will turn out soon what will be the effects of the whole process on the carbon market.


The allocations for some Polish installations for 2012 will be decreased and set aside for the reserve pursuant to the new draft Law. For additional allowances may count the installations which were subject to change.



The objective of the requests for proposals currently released by the Air Resources Board in California is to administer financial and transaction services to support up to six quarterly GHG allowance auctions and up to six “reserve sales” to implement the California cap-and-trade program. ARB is anticipating the first California allowance auction will take place in late 2012. The auctions will continue based on the calendar quarter for the remainder of the program.

The deadline for receipt of proposals is December 2, 2011.


The Californian Final Regulation Order belongs to legal measures regulating cap-and-trade schemes that apply the concept of strict ex ante holding limits as regards the volumes of allowances, the entity is eligible to possess.

Section 95920 of the Final Regulation Order defines the holding limit as the maximum number of California GHG allowances that may be held by an entity or jointly held by a group of entities with a direct or indirect corporate association at any point in time.


The said approach is quite unique taking into account the mechanisms of the European Union Emissions Trading Scheme. The review of the oversight measures of the EU ETS is  underway effecting these days in adopting by the European Commission the view that emission allowances should be considered financial instrument and all infrastructure of the financial market should generally apply thereto (with some exceptions – see: “MIFID II and emissions – consequences under preliminary investigation”).


Taking into account in this context the newly announced MiFID II and MiFIR Proposals it is apparent that the different regulatory measure has been considered appropriate in that regard i.e. position limits taken, however, on an individual basis and applied ex post.


The issue is quite fundamental when it comes to commercial strategies on the carbon market. It seems that emissions market participants have legitimate interests to be able to be confident in the rules that could have an impact on the possibility to execute previously agreed transactions, and not to be surprised by the sudden regulatory measures introducing, hypothetically, a ban on certain types of transactions or on certain counterparties.