The European carbon market is relatively young but growing rapidly. As it gets more sophisticated, it is important that the rules governing oversight of the market keep pace with its development and adequately address risks that may arise.
In principle, anyone can trade in the carbon market. The main categories of traders are energy companies and industrial companies that have obligations under the EU ETS, and financial intermediaries such as banks which also act on behalf of smaller companies and emitters.
To ensure a safe and efficient trading environment and to enhance confidence in the market, the European Commission has made a proposal to fully include emission allowances within the scope of revised rules governing financial markets. If the revision is approved, it would mean:
The Commission's proposals are based on an intensive and informative dialogue with stakeholders, including a stakeholder meeting on carbon market oversight held in May 2011.