European allowance theft risk – it depends where you are

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There has been a lot of coverage in the last week about the theft of approximately 475,000 EU ETS permits from a Czech Carbon Trader. What is interesting about this case is of course how it could happen in the first place, given that each and every EUA (carbon allowance) has its own unique serial number. How are these dodgy allowances sold, one can almost imagine a sub market, conducted in the shadows, where EUA are traded for brown packages full of Euros.

What is more interesting is how holding these stolen allowances in different parts of Europe will have a greater or lesser degree of risk attached to possession. It is only in cases like this do we remember that possession of stolen property is treated very differently, depending on which Member State you are in. For example, in the UK if you are found to have any of these allowances in your registry account, they are stolen goods and although you believed they were legitimate when you bought them, they could be confiscated without compensation. However, in Belgium (and other Member States), if you purchased the EUA in good faith, at a reasonable price, they are legally yours and you would not stand to lose money over the transaction. Even if they were taken off you, I understand you would be compensated for your loss.

This might go some way to explain the motivation for the theft in the first place, apart from money. It begs the question, if you are based in the UK, how do you know the allowances you have recently purchased are legitimate and how do you know assess the risk.


Director of UK Steel

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