ESMA suggests that the EC could consider the introduction of position limits on carbon derivatives and the amendment of EUA position reporting

ESMA suggests that the EC could consider the introduction of position limits on carbon derivatives and the amendment of EUA position reporting

On March 28^th, 2022, ESMA published its Final Report on the EU Carbon Market (ESMA, “Final Report on Emission allowances and associated derivatives”). In this Report, ESMA invites the EC to consider the introduction of position limits on the open position a person may hold in European Union Allowance (“EUA”) derivatives and economically equivalent OTC contracts. To this effect, ESMA presents the arguments in favour and against their application. Moreover, ESMA recommends, inter alia, the amendment of EUA position reporting. ESMA’s Report will serve as a basis for the EC’s, the Council’s of the EU and the European Parliament’s decision of whether additional measures to regulate the carbon market are deemed necessary. ESMA will assist with the implementation measures and with additional data analysis or advice that could be useful in future deliberations on the EU carbon market.