EU Has Legal Problems Following Emissions Trading Fraud

The European Union has been called in a Belgian court by an Italian company who fell victim to the cyber theft of carbon emissions permits at the beginning of this year.

According to The Guardian, TCEI of Italy, a holding company for trading firm The Cube Energy, is trying to recover 267,991 allowances stolen in January by hackers from the Austrian registry.

The company wants the European Union, as operator and regulator of the Emissions Trading Scheme, to reveal the current holders of the stolen permits.

The Austrian national registry, which has suspended trading activity since January, when a total of 3.3 million emissions permits were stolen as a result of a cyberattack, confirmed having tracked down the allowances, but refused to release their serial numbers or current status citing national data protection laws.

"We know the credits are stolen, but not where they are. Our main goal is to recover them," said Laurent Arnauts of Arnauts Solicitors, the legal representative of TCEI in the Belgian court case.

The European Union Emissions Trading Scheme (EU ETS) is one of the most important pillars of Europe's climate policy. It allows more than 10,000 companies to trade in carbon emission permits that were allocated to them via national registries.

Following the Austrian incident the EU completely suspended "spot" trading, and even if the activity has since resumed in some markets, traders are still holding back.

"The short-term financial benefits of reopening are far outweighed by the long-term benefits of fully protecting our customers," Henrik Hasselknippe, a managing director at the Green Exchange told The Guardian.

"We still do not feel we have an overview of the situation. The Austrian government has so far refused to publish a list of missing allowances and we will continue to be worried until they do so," he added.