Following the Bourse Consult study into the Post Trade infrastructure for Carbon Emissions Trading, we are pleased to see that the European Commissioner for Climate Action has decided to take action to improve the integrity of this important market. In a press release issued recently the Commissioner, Connie Hedegaard, announced a review to look at the level of regulatory oversight and to determine what is needed to safeguard the continued integrity of the market. Possible outcomes of this study may be to classify emission units as financial instruments and to bring the market under financial markets legislation – two actions that we would applaud.

The Commission has issued a handy Q&A about the process and the full detail of the process and the background to it can be found here.

Our report on the Post-Trade Infrastructure for the Carbon Market earlier this year drew attention to the vulnerabilities in the settlement infrastructure for the carbon market. These have been illustrated again in recent weeks by the way the Trojan virus called “Nimkey” has infiltrated certain European emissions registries. more >>