Question ID:
Legal Act:
Regulation (EU) No 575/2013 (CRR)
Credit risk
COM Delegated or Implementing Acts/RTS/ITS/GLs/Recommendations:
Not applicable
Disclose name of institution / entity:
Type of submitter:
Credit institution
Subject Matter:
European Union Allowances (EUA) as credit risk mitigant

Could European Union Allowances (EUA) received by a credit institution as collateral be considered as eligible one from prudential point of view ?

If yes, how EUA should be considered ? As financial collateral or as other physical collateral ?

Background on the question:

EU Allowances (EUA) are climate credits (or carbon credits) used in the European Union Emissions Trading Scheme (EU ETS). EU Allowances are issued by the EU Member States into Member State Registry accounts. EU Allowances are issued by the EU Member States into Member State Registry accounts.

Such EUA are received by Europen Credit Institution in collateral of financing transaction (such reverse repos for example).

The regulation 575/2013 is not clear regarding the prudential treatment of such collateral.

Date of submission:
Published as Rejected Q&A
Rationale for rejection:

This question has been rejected because the question is not sufficiently clear or has not sufficiently identified a provision of a legal framework covered by this tool that creates uncertainty and for which an explanation is merited in terms or practical implementation or application.

The Single Rule Book Q&A tool has been established to provide explanations and non-binding interpretations on questions relating to the practical application or implementation of the provisions of legislative acts referred to in Article 1(2) of the EBA’s founding Regulation, as well as associated delegated and implementing acts, and guidelines and recommendations, adopted under these legislative acts.

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Rejected question