(2004/C 78 E/0450)

WRITTEN QUESTION E-2792/03

by Eija-Riitta Korhola (PPE-DE) to the Commission

(19 September 2003)

Subject:   Opportunities for aggressive speculation in emissions trading

From 2008, national assigned amount units (AAU or BSA amounts) will be adjusted to take account of cross-border transfers of emission allowances so as to ensure that a selling country's AAU (BSA) amount is decreased and that of the buying country increased by the quantity transferred.

If, however, a cross-border transfer of emission allowances in the period beginning in 2008 is due to the fact that the allowances in question were originally just banked in the country concerned, the country of origin will obtain the amount of banked allowances twice over. Broadening out the problem onto a large scale, it is hard to believe, especially in the light of their governments' action, that the Member States will start to engage in speculative transfers of this kind, but any non-EU Annex I country (if it acceded to the Kyoto Protocol and joined the EU emissions trading scheme before 2007) or a company from such a country would be able, by proceeding as described above, to double the amount of allowances for sale. It will also be possible in a way to exploit market forces if emission allowances have been banked in a rival selling country (for instance in a transfer from Ukraine to Germany). The rival seller's market position will consequently be weakened, whereas the market player in question will benefit twice over.

Another typical form of aggressive speculation could occur if the kind of practice seen on the foreign exchange markets some years ago were to be repeated on the emissions trading market. In theory, a non-EU operator could thus hamper a competitor operating within the EU (and within the emissions trading scheme).

Has the Commission made plans to deal with aggressive speculation of this type in emissions trading? If so, what plans?

Does it still see no need for the idea of employing market intervention (using an EU central register, for example) to stabilise disturbances on the emissions trading market?