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UPDATE 2-EU says spot carbon market may re-open next week

Published 01/28/2011, 08:06 AM

* Some exchanges rule out re-starting spot trade next week

* CO2 registries say they cannot confirm a re-opening date

* Lobby demands firm deadline after Jan. 26 target passed

(Adds quotes from carbon lobby, Czech, France, Estonia)

By Gerard Wynn

LONDON, Jan 28 (Reuters) - The spot market in European Union emissions permits may re-open next week, the EU executive Commission said on Friday, but carbon exchanges and registers doubted an early restart.

The uncertainty riled the carbon lobby which wants a definite deadline for the resumption of a market which normally trades about 40 million euros a day.

The spot market closed on Jan. 19 after the theft of EUAs worth up to 30 million euros, and all national registries, the repositories of permits called EU allowances (EUAs), remained shut on Friday two days after the Commission's previous Jan. 26 deadline for a phased re-opening.

The Commission said earlier this week that it wanted registries to confirm minimum security measures before reactivating them, adding it would give the market 24 hours notice in advance.

"The first (registry) reports have been received and are under review by the Commission," said climate action spokeswoman Maria Kokkonen.

The Commission would update the market via its climate action website late Friday afternoon, she added.

Regarding the possibility of a registry re-opening next week, she said: "It depends on the length of the report, the time needed to assess it. Theoretically it's possible."

That was not good enough for the International Emissions Trading Association, which said all the main registries "must resume" business in the first week of February.

"While the safety of online banking has been scaled up, EU Member States have failed in protecting an 80 billion euro market, thereby undermining the EU's main tool to reach climate objectives," said Henry Derwent, head of IETA.

Registries and environment ministries on Friday were unable to confirm any deadline for re-opening as they ran security checks with the Commission.

"We're not in a position to give timescales," said a spokeswoman for Britain's energy and climate ministry.

A French environment ministry spokeswoman said: "The re-opening date is not known. The Commission and member states will decide when to lift the suspension, tests are ongoing in the system to discover the weakness. Until the test phase is not over registries will remain suspended."

Estonian Environment ministry spokesman Pavel Ivanov said they did not have a date. The Czech registry said on Thursday that it would be shut for at least six weeks, and on Friday expressed doubts about any wider re-opening. "I cannot imagine that European registries will open next week," said Jiri Stastny, general director of the Czech carbon market operator OTE.

All exchanges remained closed to spot trade.

ICE Futures Europe, which operates the largest European emissions exchange, said on Thursday spot carbon trade would be suspended until Feb. 7.

Paris-based BlueNext, Dutch bourse Climex and Nasdaq OMX Commodities have all said their spot carbon trade was suspended until further notice.

The Czech registry said on Thursday that its missing EUAs had cropped up in registries in Germany, Estonia and probably Britain. Their registries were not immediately available for comment on Friday.

The liability for stolen EUAs remained uncertain. The Czech registry has published the full list of missing permits at: http://www.ote-cr.cz/o-spolecnosti/files-novinky/blocks_CZ_20110118_public.pdf

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