WRITTEN QUESTION E-2792/03 by Eija-Riitta Korhola (PPE-DE) to the Commission. Opportunities for aggressive speculation in emissions trading.
Date: 2003-09-19
Institutions: European Parliament, Provisional data
Subjects: Council of the European Union, EC Directive, EU environmental policy, degree of pollution, greenhouse gas, industrial pollution, reduction of gas emissions, tradeable emission permit

C 78 E/430

Official Journal of the European Union

EN

27.3.2004

(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?

(2004/C 78 E/0451)

WRITTEN QUESTION E-2793/03

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

(19 September 2003)

Subject: Definition of hot air and ban under the Kyoto Protocol

At present the obstacles to allocation to companies posed by the EU emissions trading directive and the
rules on competition laid down in the EC Treaty (Articles 87 and 88) probably go beyond what is
necessary. That is why it is considered unlikely that ‘hot air’ (in other words emission allowances whose
sale is not due to actual reductions in emissions) will come onto the market. The Kyoto Protocol itself does
not prohibit the sale of or define hot air.

Does the EU have any means of preventing Member State governments from selling hot air directly
(without first allocating it to companies)?

If not, does the Commission consider it necessary, not least in order to guarantee consistent international
practice, to devise a definition of hot air and propose that the Kyoto Protocol be amended in such a way
as to incorporate that definition and a ban on the sale of hot air?