UK emissions trading system reopens after £100M loss

The UK's emissions trading system reopened this morning (February 4) after a Europe-wide shut down which cost business an estimated £100 million.

On January 19, following a string of successful cyber-attacks on EU member states’ emissions trading system (EU ETS) registries, the systems were shut down across the continent.

Due to the depth and scales of the attacks the European Commission (EC) was forced to suspend all internal and international transactions within all the EU ETS registries.

Head of European Carbon analysis at Thomson Reuters Point Carbon, Kjersti Ulset, said: “Based on the average spot volume so far this year, Point Carbon Thomson Reuters estimates the value of the lost spot trading since 19 January to be in the order of about £100 million.

“With five national registries and the Bluenext exchange now back online, the European carbon market has started its recovery after the devastating cyber attacks.

“We expect most other registries to open within the next weeks, but it is crucial the European Commission is certain that required security measures are in place before it gives Member States the green light.

“Market confidence can only be restored if the security systems are absolutely solid against such attacks. Investigations must also continue to find out exactly what happened, and issues related to liability and financial compensation for stolen allowances must be clarified.”

However, the Government has sought to play down the impact of the suspension claiming it only impacted the spot trading arena of the carbon market, (around 10% of the sector) so the disruption has been minimal to the market as a whole.

The futures market, which is predominately based in the UK, and accounts for the remaining 90% of the carbon market, has ‘shown only a limited level of disruption’, according to climate change secretary Greg Barker.

Mr Barker said: “Trading here has continued at broadly the same volumes as before the registries were closed and the impact on the EU emission allowance price has been limited.”

The registries are the holding point for all EU emission allowances and an important part of carbon market trading.

In January the UK agreed with the EC to keep its system offline until enough evidence was there to show minimum security requirements were

The UK’s registry, which is administrated by the Environment Agency, said earlier this week it believed the system was now safe to reopen and was this morning at 7am.

Luke Walsh

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