January 2011

Linking Innovative Technologies with Global Energy Markets

Dear Reader,
CONTENTS
Welcome to our NET Newsletter, tracking the latest news related to
new energy technologies.
 Business and
NET update focuses on how new technologies are changing the global Technology News
renewable and non-renewable energy markets. In doing so, the NET
newsletter provides a well-rounded view on the most up-to-date energy
news coming from a broad range of sources including policymakers,  Policy News
scientists, energy financiers, and so forth.

This month we have news of an carbon trading by European  Commentaries and

Union –Emission Trading System that sets greenhouse gas
emission targets and allocates carbon allowances to Installations to Analysis
emit gases. However a certain amount of carbon allowances are set
for countries in order to protect the environment. Installations need
to provide an account for their actual emission by the end of the year
to EU-ETS

The Installations can buy allowances from the market if they need to Contacts us:
emit more greenhouse gases or they can sell their allocated
allowances to other installation depending upon the requirement by
MEC International Ltd.
different installations. Thus this policy ensures the fixed amount of
allowances allocated in EU for environment stability.
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raised in this newsletter, please contact me at info@meconsult.co.uk.
Please let me know if you have any particular news items that you
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Nitin Verma
Editor e-mail:

info@meconsult.co.uk
 Business and Technology News

European Union Carbon Advanced with the Recovery from

Recession (03/01/2011)
„Ewa Kurkowska‟ in Warsaw from Bloomberg reports that carbon trade programme increased
7.7% last year after a decline of 23% in 2009 and 29% in year 2008, which is a sign of
recovery of economy due to recession. It is predicted that there will be rise in auction of Co2
permits where bloc would auction 60% of all the Carbon permits by the year 2013. Read
More

European Union Carbon Registries Ceased by Cyber Attacks.

(19/01/2011)
The research done by the Business Green Staff revealed the further hacking of
Austrian Carbon Registry where theft of 470,000 carbon permits is reported by Czech
firm. The officials confirmed that they do not have any Information of EAU after
having first delivering allowance to Estonia. Similar Issues came from Poland and
Estonia where the officials stated their registries were shut. These phishing scams
happened in Germany, Czech and Romania last year. Read More

BlueNext Suspended Carbon Trade and Payments. (19/01/2011)

Report from „Nina Chestney‟ and „Jane Baird‟ of Reuters got information from
French spot emission Bourse BlueNext halting the trade of carbon unless it
implements security measures after shut down of trading operations in five EU
countries. The Czech carbon registry which lost its carbon permit is [ID-
nLDE7010Y0]. Read More

Temporary Market Freeze Hit Carbon Trader Confidence

(20/01/2011)
The researcher „Jessica shankleman‟ has expected an affect on market confidence due
to couple of cyber attacks on carbon Emission Trading and emergency shutdown of
carbon trading for a week to upgrade the security system. This shut down costs
around 70 million Euro‟s to traders assuming the trade of 5 million tonnes of carbon
traded every week. According to Head of European carbon analyst‟ Kjersti Ulset‟ this
freeze will have an impact of future trading. Read More

Hackers Swapped carbon credits for 38 million US dollars. (21/01/11)

„Steve Zwick‟ reports on the fragmented system of EU Emission Trading Syetem
where each country have its own registry which becomes crumble some for
calculating credits. Furthermore, the hackers were well aware of the system and they
timed their operations accordingly. Read More

Indefinite suspension of Carbon Trading by European Commission.

(27/01/2011)
Article written by „Leigh Philips‟ from guardian.co.uk on 27th January 2011 revealed
that European commission has put the carbon trading on halt until all the countries
ensures their system are safe and regulated safety measures are taken. Read More

Policy News

Flawed Carbon Credit Scheme must be banned in Europe. (17/01/2011)

The Investigator „Damain Carrington‟ from Gaurdian.co.uk found that pollution

allowances through Europe ETS have certain loopholes in the policy. So European
Union Emission Trading System has proposed a ban to regulate from 1st Jan 2013 but
some of the companies and campaigners have a different view point regarding the
Issue. Read More

Closing of all EU Carbon Registries (19/01/2011)

Business Green staff further reported a Newsflash where European Commission shut down all
the Emission Trading scheme registries temporarily for a week for the purpose of security
updates. This measure was taken to stop recurring security breaches in previous months. Read
More
EU Commission system weakness and need for security. (24/01/2011)
Frank Watson 24th of January 2011 wrote an article on carbon credits hacking
scandal and urgent need for reliable IT security in the system. As per media report,
the hackers gained access to login details of the registry and stole around 2 million
allowances contributing 0.02% of total number of allowances in the circulation. Read
More

Charge on Seven in Carbon Trading Fraud Case (26/01/2011)

„Philip Inman‟ and „Tim Webb‟ from guardian .co.uk reported charge on seven people in
case of cheating with the public revenue and transferring a property of carbon accounts.
Those seven lives in south east England mostly resides in outer skirt London area. The fraud
done have costed 5 billion Euro‟s to EU governments. Officials from ICE Futures-the largest
emission trading exchange announced cut off in trading till 1st of February 2011. Read More

Requirements that needs to be fulfilled by the EU members to

resume Normal Operations. (26/01/2011)
As per the latest information by „Mariah Jen‟ from „iewy‟ news reported that considerable
progress has been made in the last few days after the suspension of transaction by EU- ETS
registry system. Agreement made on Monday reached on guidance that necessary
requirements need to be fulfilled by EU countries in order to resume normal operations. Read
More

Commentary and Analysis

Does Polluting the environment needs to be paid by Companies?

Mark Vernon
Source: BBC Magazine
The companies can pollute the environment with tonnes of carbon if they have carbon
credits. This is the regulation of EU-ETS emission trading system. However the
system works for the sustainability of environment by charging for climate change
through pollution but at the same time companies gets a legal right to emit the carbon
and other greenhouse gases in environment. „Jeremy Bentham‟ is associated to know
whether this system really works as it takes time to observe the climate change by
scientists.

The other area that needs to be examined is that does wealthier nations takes
advantage of carbon credit by paying for carbon allowances?

The wealthier nations can emit more carbon buying credits from poor countries that
have surplus amount of carbon credits which they do not use. This results in the
increase of pollution by some countries introducing inequality in the world.

Source: BBC Business update

20 January 2011

The frauders developed the bogus website and stole the password details whereby
they would have kept an eye on the accounts of victim company with the intention of
selling credits directly into the market for cash and they transferred those permits in
their own accounts. The negligence of some EU members allowed d the thefts to do
this phishing scam. (Jos Delbeke- Senior Commission official for Environment). It is
assumed that the stolen carbon credits would have been transferred to Estonian
account but Estonia is the first country to close their own registry. The EU-ETS shut
down the entire carbon trade in the market to find out the hacked credits.

EU-ETS tool against Climate Change affected every household.

Rowena Mason
Source: The Telegraph

According to Reuters, the weapon used by EU to protect climate change became

profitable for hackers and wealthier nations. Few clicks on mouse disappeared
500,000 carbon allowances from EU registries putting the market to halt their trading
operations which would probably affect every household in European Union member
countries. It has raised the prices of household bills and rate of finished products for
the reason of social good of decreasing carbon emission.
The scandal in January 2011 is not the first scandal in carbon trading history. Last
year Hungry misused the market by recycling credits, using the new credits for its
own and selling the old credits to other countries to make profit. It has been found that
more than 100 people have been arrested in last few years mainly from UK, Denmark,
Holland, Spain, and France.
The fraud of these kinds of carbon thefts such as in January 2011 are cross border or
International frauds which have to deal with International regulations. The questions
that is being asked is “who will pay for those lost credits”?

Effect on Industry: It is predicted that these kinds of scandals will lower the
confidence of traders and they will have a fear buying carbon credits from other
countries.

Effect on Reputation of ETS: These kinds of carbon phishing scams lowers down the
reputation of EU-ETS regulation body which does not provide the secure syetem.
There is a question mark on the regulation authority of EU at the time of trading halt.

Unusual Traders in the system: „ The Sunday Telegraph‟ also revealed the number of
small UK companies which are using carbon accounts for their business that does not
even exists that they registered with the address of suburban areas.

Weak Countries prefer selling carbon credits: A number of carbon allowances are
sold are different countries to make profit to high income countries without making an
effort to use it in their own country.

Now the challenge faced by EU-ETS is how to develop a secure and safe carbon
trading system and how the process of trading need to be monitored having seen the
considerable loss in January 2011.

For the latest updates please access our website:

http://www.meconsult.co.uk

If you would like to learn more about this newsletter or our forthcoming events, or
would like to suggest an event or article for inclusion in the next edition, please do not
hesitate to contact me at info@meconsult.co.uk.

Nitin Verma
MEC International Ltd.
Granville House
132-135 Sloane Street
London SW1X 9AX
Tel: 020 7591 4816
Fax: 020 7591 4801
E-mail: info@meconsult.com