A new world order for carbon trading in the EU Emissions Trading Scheme (the EU ETS) was ushered in on 20 June 2012 by the migration of the carbon trading account and registry system from separate Member State registries to a single Union Registry. These changes are borne out from a number of regulatory developments and market issues, such as the VAT fraud and the theft of carbon credits through cyber-phishing or hacking. The migration comes at the end of process whereby access to accounts were suspended on 3 June 2012 and reopened on 20 June 2012. A number of issues have already arisen with respect to the new registry infrastructure that were not anticipated. For instance, we now know that a significant number of account users across all Member State registries have failed to nominate an Additional Authorised Representative (AAR) ahead of the suspension. This means that under the new regulations, without such AARs being in place, it is not possible to now make a transfer from an account in the Union Registry. This has the potential to impact delivery obligations that are due in the immediacy of the lifting of the suspensions.
Similarly, there have been other "unknowns" prior to the migration of which we now know more. Although some "unknowns" remain, this Reed Smith Client Alert answers the frequently asked questions regarding the Union Registry.