With MiFID II Directive, emission allowances have become financial instruments under Annex I, Section C (11).

 

Under MiFID II derivatives on emission allowances are financial instruments (Section C4) and, consequently, EMIR instruments.

 

Emission allowances traded spot are not covered by EMIR since the term 'derivative contract' defined in EMIR does not include such a product.

 

In contrast to energy markets, spot markets of emission allowances do not fall under the REMIT.

 

Moreover, despite being subject to weekly and daily position reporting, derivatives on emission allowances do not fall under the definition of commodity derivatives under MiFID II and are therefore not subject to position limits and position management controls.

 

Emissions markets are also subject to the Market Abuse Regulation (MAR).