On June 2, 2009 the Paris exchange BlueNext traded a record 19.8 million tonnes of European emission allowances, driven by a value-added-tax carousel rather than by smokestacks. Europol put the loss at roughly five billion euros. The system had also crashed on leaked data in 2006 and been looted through its registries. Yet it has cut covered emissions 51 percent since 2005, because every fraud was financial while the tonnes at the stack were real.
Who's who
- Arnaud MimranParis trader convicted in 2016 of the French VAT carbon fraud
- Marco MoulyMimran's partner, sentenced to eight years in 2016
- Jos DelbekeLong-serving European Commission architect of the carbon market
- Rob WainwrightEuropol director who warned the frauds endangered the system's credibility
Where it happens
- Paris, France+5 more episodesHome of the BlueNext exchange and the carbon connection
- Frankfurt, Germany+2 more episodesProsecutors raided about 230 premises in April 2010
- London, United KingdomWhere the Dosanjh ring was sentenced in 2012
- Romania1.6 million allowances were taken from a cement company's account
- HungarySold surrendered credits that resurfaced on BlueNext
Timeline
- April-May 2006Leaked 2005 emissions data drops the allowance price from €30.65 to €11.40.
- June 2, 2009BlueNext trades a record 19.8 million tonnes in one day.
- December 9, 2009Europol prices the carousel at about €5 billion over eighteen months.
- April 28, 2010German prosecutors raid about 230 premises tied to Deutsche Bank and others.
- January 19, 2011The Commission suspends transactions in every national registry.
- July 7, 2016A Paris court convicts eleven in the carbon VAT fraud.
Still debated
Historians and economists dispute how much of the emissions decline stems from the trading system versus recessions, renewables, and gas. Europol's five billion euros is an estimate of treasury losses, while adjudicated sums are far smaller. Recent reforms are read by industry as stability and by some environmental groups as weakened ambition.