The European Commission’s decision last week to suspend transactions in the EU carbon market registries system following a series of cyber-attacks has understandably received a great deal of news attention.

These unauthorised transfers of allowances caused substantial economic losses to some companies: our best estimate today is that roughly two million allowances – worth, at current prices, a total of around €30 million – were illegally transferred out of certain accounts.

The attacks also highlight real security issues that the EU needs to deal with by adjusting the structure of the system.

First, though, these problems need to be set in perspective. The allowances that were transferred amounted to fewer than 0.02% of those in circulation. The losses compare with an average asset value of around €30 billion in the system. And the suspension only affects the spot market, which accounts for less than one-fifth of carbon-market trades; the futures market – the biggest segment of the market – remains unaffected.

Nor does the suspension undermine the rationale of the system as a whole. The EU set up the emissions-trading system (ETS) for a good reason – to cut greenhouse-gas emissions at the lowest cost possible. The power stations and industrial plants covered by the system must surrender one emission allowance, from a fixed and declining pool, for each tonne of carbon dioxide they emit.

That these allowances can be traded gives companies flexibility, helping ensure that emissions are cut where it costs least. And over the past few years, emissions have dropped significantly (though the economic crisis has also played a role since 2008).

The system is therefore fulfilling its allotted strategic role. What these attacks show are two things: firstly, that the success of the ETS in putting a price on carbon and developing a liquid market makes it an attractive target for crime; and, secondly, that some criminals have identified the weakest link in the system that records transfers of ownership.

Trades in allowances are tracked and authorised by the ETS registries system, a decentralised system composed of national electronic registries that is co-ordinated through a centralised log.

These attacks affected the national electronic registries. This is where the system is weakest.

This had been known to be the case for some time. As EU legislation requires member states to take all necessary steps to ensure the security of their registry, the Commission had therefore been working closely with member states to strengthen the security of all national registries. These efforts were then stepped up in early 2010, after the first, isolated ‘phishing’ attacks – online attempts to steal confidential data such as passwords.

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Fortunately, the issue of national registries’ security is now only a temporary one: from next year there will be a single, centralised registry operated by the Commission. Recent events show that the move to a single registry is timely.

With three attacks on national registries this year, and other registries known to be vulnerable, the Commission had to take action to secure the registry system.

That is why, on 19 January, we temporarily suspended all spot transactions in the system for at least seven days. The suspension means that physical delivery of allowances cannot be executed.

Member states’ governments have now agreed with the Commission on a set of minimum security requirements that will need to be met by each registry before it can become fully operational again.

Some member states already have a high level of security in place and should be able to resume operations quickly. Others may need longer.

These steps should be seen as part of a broader pattern. As the carbon market matures and expands, its infrastructure is being simplified and strengthened. Business has been benefiting from the efficiency of the EU cap-and-trade system; what the EU’s member states and the Commission are currently doing is working to ensure that the market environment is as secure as possible.

Jos Delbeke is director-general for climate action in the European Commission.