Environmentalists thought they had found a “market solution” to controlling carbon emissions. Then energy traders have to go screw it all up.
German prosecutors raided Deutsche Bank and RWE, Germany's second-biggest utility, today in a wide-ranging probe of tax-evasion and generally shading dealing in the European carbon emissions market.
The Frankfurt feds have targeted 150 suspects at 50 companies, raided 230 homes and offices nationwide, and has frozen assets. Deutsche Bank and RWE said they are cooperating with the probe and aren’t the focus of the investigations, according to Bloomberg News.
The U.K., France, Netherlands are among nations that started investigations last year of “carousel fraud,” where carbon traders collect tax and disappear before turning it in to authorities. Today’s raid was the biggest related to a fraud that may have tainted an estimated 7 percent of carbon trades in last year’s $125 billion market.