Tag Archives: Environment

Cyber Attacks Force EU to Close Emission Trading System

A series of cyber-attacks on national registries, where carbon permits are stored, have forced the EU to close its emissions trading system (ETS) for at least a week. The European Commission posted the announcement on its website on Wednesday after Czech Republic-based firm Blackstone Global Ventures said about €6.8 million of carbon allowances appeared to have disappeared. Thefts on electronic registries in Austria, Greece, Poland and Estonia have also been reported over the last days.

“They will over time undermine the credibility of carbon trading as a policy measure.”

Kjersti Ulset


After discovering unauthorized trading on its account on Wednesday, Blackstone contacted the Czech registry OTE AS, which promptly closed all operations and began an investigation. The Paris-based BlueNext SA, operator of the world’s biggest spot exchange for permits, followed suit, as did registries in Poland and Estonia, before the EU finally imposed a region-wide shutdown.

It’s not the first time cyber criminal have been trading stolen permits at the international ETS market, but never has the activity been so comprehensive that the regulators have been forced to close the whole market.

“Incidents over the last weeks have underlined the urgent need for enhanced security measures,” the EU commission says in its announcement of the closure.

The bloc’s ETS system will be down, at least until 26 January.

Full statement

Q&A’s

A Criminals Market

According to The Guardian, European Authorities estimate that up to 90% of the whole market volume is plain fraudulent activities.

Belgian prosecutors highlighted the massive losses faced by EU governments from VAT fraud today after they charged three Britons and a Dutchman with money-laundering following an investigation into a multimillion-pound scam involving carbon emissions permits.

The three Britons, who were arrested last month in Belgium, were accused of failing to pay VAT worth €3m (£2.7m) on a series of carbon credit transactions.

European authorities believe the EU has lost at least €5bn to carbon-trading VAT fraud in the last 18 months.

Last month, the European police agency Europol reported that the European Union’s Emissions Trading Scheme had been victim of fraudulent trading activities over the past 18 months, worth €5 billion for several national tax revenues.

Europol, the EU’s law-­enforcement operation, fears the fraud will be used in other areas, especially gas and electricity trading markets, after criminals found VAT fraud was one of the most lucrative financial frauds.

The Most Lucrative Financial Fraud

Wednesday’s announcement and similar cyber-attacks have also damaged the EU initiative, together with reports of tax fraud and the recycling of used credits, the EUobserver.com reports.

“They will over time undermine the credibility of carbon trading as a policy measure,” says Kjersti Ulset, manager at Point Carbon, a company that reports on Europe’s emission trading, carried out in a network of registries across the union.

Despite its pioneering position, Europe’s ETS system has attracted criticism over its six years of operation, with some businesses saying it threatens the bloc’s competitiveness, while NGOs argue emission thresholds have been set too high.

By placing a price on carbon, Europe’s trading system is designed to lower company emissions and therefore protect the environment from global warming. Corporations received emission permits for free under the first phase (2005-2007) of the scheme. Some, however, are forced to pay for a portion of their permits.

The European emission trading system is the world’s largest, as the US plans for a similar cap-and-trade scheme was blocked by the US Senate last year.

Carbon permits are, however, traded as ordinary securities at the Chicago Carbon Exchange.

Brussels wants to see energy companies buy all their permits with their own money from 2013 and onwards, with other heavy industries gradually phased in by 2020.

China experts suggest pilot ETS projects could appear in Beijing’s next five-year plan, set to be approved in March.

Here at The Swapper we have been skeptical to the ETS all along.

It’s an artificial market, created on basis of nice thoughts, without a real supply/demand situation and is regulated in a way the is more similar to a pharmacy than a financial market.

But what is really worrisome, is the sharp increase in this kind of activity.

Just wait till you see the Chicago Board Option Exchange gets hacked!

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BP's Oily Aftermath – Colbert Style

One last segment from the Colbert Report, Colbert is making jokes at BP‘s expense, and with a great follow-on interview with Michael Blum, an environmental scientist from Tulane.  Interesting mixed with a message about tainted shrimp…

“Our inspectors are so good they can find shrimp taint by smell.”

Stephan Colbert

Notice at the one-minute mark, the weaselly news-reader’s description of the BP spill — “when oil began seeping” into the Gulf. Seeping? BP could have written that manipulative phrasing.

I’m impressed that Colbert is able to fit so much factual information into segments that are also funny and ironic.

If you want to see masterful PR manipulation, by the way, notice the new BP ads (no link, but they’re turning up as intros to MSNBC online vids).

Pristine waters, happy citizens, a cohort of rested and ready-to-restart BP beach cleaners; and one core message:

“Now that the oil is gone from the beaches, we’ve done our job. And if oil ever returns to the beaches, we’ll be back just that fast to clean it up again.”

And all that clean water in the background. The words may say “beaches,” but the pictures say “all outdoors.”

Can you smell the manipulation? Smells like that oil “taint,” Colbert joked about.

Vodpod videos no longer available.

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Statoil May Buy BP Assets, Expert Says

Fears Of Oil Spill Consequences Subside, CDS Spreads Show

EU To Seek Temporary Ban On Deep-Water Oil Permits

BP Rules Out Issuing New Shares

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So, You Thought BP Was An OIL Company?

Dockwise To Assist BP In Gulf Oil Spill Clean Up

Gulf Oil Spill: A Carefully Planned Inside Job?

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Oil Spill Makes Waves

BP Is Drowning In Its Own Oil Spill

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Statoil May Buy BP Assets, Expert Says

As BP now is about to sell assets for nearly NOK 200 billion, Statoil may be one of the buyers, says Norway‘s foremost expert on the petroleum industry economics, professor Øystein Noreng at the Norwegian School of Management.

“Statoil is looking, Statoil’s got a lot of money and they’re going global.”

Øystein Noreng

“Statoil is looking, Statoil has a lot of money and thet’re going global. It is clear that BP must sell assets worth hundreds of billion, but exactly which assets BP will sell, to who, or from whom Statoil will buy, I don’t know,  the  know, professor Noreng says in an interview, published on the website E24.no.

Øystein Noreng at the Norwegian School of Management is regarded as one of the top experts in the world on petroleum economics.

Within the next 18 months, BP will seek to reduce net debt by 10 to 15 billion dollars. Among other things, BP will sell assets for a total of 30 billion dollar. (185.2 billion Norwegian kroner).

“BP will sell a portion of their holdings, even in Mexico. It’s not known if it’s the deep water installations,” says Noreng.

The new top manager at BP, Robert Dudley, said at the current quarter earnings report presentation that he will change the BP from a company that produces four million barrels of oil per day, to one that produces 3.5 million oil per day. Dudley also said that the company will have assets of “higher quality” and a more focused portfolio.

It’s a quite polite way of saying;  BP must sell a lot of assets.

BP reported Tuesday morning on a negative second quarter results at 16.973 billion dollars.

Loss for the second quarter of 2010 will stand as one of the biggest losses for a British company ever.

The bill for oil disaster has, according to the company itself now reached 32 billion dollars.

BP says in a statement that the company will not shrink “dramatically” in the United States. Chairman Svanberg sees no great change in the structure of the company, E24.no writes.

A Heap of Scrap

BP have earlier been accused of having the worst platforms on the Norwegian continental shelf, whit half of the oil installations in the North Sea outdated.

BP’s own fields Valhall is being described as a heap of scrap, by sources speaking with the Norwegian news paper, Dagbladet.

“We’ve had problems with bacterias eating up the pipes from the inside, it’s about just the paint again. One worker started to pick off some old paint on one of the tubes, and then suddenly the oil sprayed out. The pipes are so rusty that they hardly can be disassembled, “ said an anonymous source to the newspaper.

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The Statoil shares (STL) ended flat in today’s trading at Oslo Stock Exchange, while the Benchmark index declined 0,29%.

Related by the Econotwist:

Norway’s Oil Fund Among BP’s Largest Shareholders As Bankruptcy Rumors Hit Market

BP Rules Out Issuing New Shares

Fears Of Oil Spill Consequences Subside, CDS Spreads Show

So, You Thought BP Was An OIL Company?

Response To The BP Derivatives Story

Gulf Oil Spill: A Carefully Planned Inside Job?

Oil Spill Makes Waves

BP Is Drowning In Its Own Oil Spill

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Filed under International Econnomic Politics, National Economic Politics