Overview

Regulatory norms in Trading & Shipping
In detail:
  • Main components of the REACH regulation, which governs the registration, assessment, authorisation and restriction of chemical substances
  • Some examples of ‘descriptors’ used in the oil products sector
  • Main points arising from the REMIT regulation on wholesale energy-market integrity and transparency
  • Main points arising from the EMIR regulation on OTC derivatives, central counterparties and trade repositories
  • Eni Trading & Shipping’s Model 231

REACH Regulation

The REACH Regulation (EC) for the registration, assessment, authorisation and restriction of chemical substances entered into force on 1 June 2007. The new regulation replaces numerous European Union regulations and directives and makes industrial companies responsible for the safety of their products.

Main points
The REACH Regulation (EC) 1907/2006 (Registration, Evaluation, Authorisation of Chemicals) published on 30 December 2006 completely revises the EU rules on chemical substance control for the protection of human health and the environment and for the first time also makes companies responsible for the safety of their own products.

Suppliers and clients
One of the most important aspects of the REACH Regulation (EC) 1907/2006 is the exchange of information between producers or importers and the users of chemical substances (downstream users). One particularly significant part of this exchange is the identification of the effective uses of the substances, so as to be able to assess them during the registration process and eventually include them in extended safety data sheets (eSDS). If a specific use for the substance is not specified in the dossier, it could lead to restrictions on its actual use. The European Chemicals Agency (ECHA) has developed a series of codes (“REACH descriptors”) in order to classify the use of substances and facilitate the exchange of information on their conditions of use in the various industrial sectors. A list of these codes and other information on their use is available on the ECHA website.

Examples

As an example, here are some "descriptors" used in the sector of petroleum products:

Domestic fleet med area (Type of information)Description (Meaning of code)Example

SU

Sector of use

SU3—Industrial manufacturing

PC

Product category

PC24 – Lubricants, greases

PROC

Process category

POC1 – Used in closed processes

AC

Article category

AC10-1 Rubber products, tyres

ERC

Environmental release category

ERC


A complete list of use descriptors for substance registration in the REACH regulations and exposure scenarios for substances linked to the oil cycle are to be found in the following websites: https://www.concawe.eu/ (Select "REACH Implementation", then "10. List of Identified Uses...") and http://atiel.org/ (Select "REACH”).

For communications on this subject please email reach.uses@Eni.it

Substances Listed

  • Fuel oil
    CAS No. 68476-33-5
    Reach registration No. 01-2119474894-22-0102
  • Diesel Fuel
    CAS No. 68334-30-
    Reach registration No.01-2119484664-27-0136.

REMIT Regulation

On 28 December 2011 the Regulation on Wholesale Energy Market Integrity and Transparency (REMIT), regulation No. 1227/2011 came into force for all European Union member states. The aim of the regulation is designed to increase transparency and the integrity of the wholesale energy markets to combat unlawful practices.
In particular, REMIT has introduced specific rules at European level for monitoring wholesale energy markets aimed at:
  • identifying market abuse regarding the manipulation (or attempted manipulation) of the market and insider trading 
  • prohibiting the above-mentioned practices in the wholesale energy market (electricity and gas)
  • identifying and pre-empting cases of manipulation (or attempted manipulation) of the market or insider trading by a monitoring system of the European energy markets 
  • adopting suitable provisions for control in consideration of the fact that national authorities have their own specific powers of investigation, enforcement and sanctioning.
The implementation of REMIT is monitored by the Agency for the Cooperation of Energy Regulators (ACER) and by the national regulatory authorities (in Italy this is the Authority for Electrical and Gas Energy and the Water system) which work together, along with the other national and European authorities (financial and antitrust authorities).

EMIR Regulation

EU Regulation 648/2012 on OTC derivatives, central counterparties and trade repositories (EMIR regulation) has been in force since 16 August 2012 and was adopted by the European Parliament and the Council of the European Union on 4 July 2012.



Interested parties
The EMIR Regulation has identified the following categories:

  • Financial counterparties, defined in article 2(8) of the regulation
  • Non-financial counterparties, defined as all companies established in the EU and that are not financial counterparties or central counterparties
  • Qualified non-financial counterparties, which are the most common of the non-financial counterparties, but differ in that the gross notional value of derivatives portfolio exceeds determined thresholds, distinct per category of derivative. Moreover, it is not objectively possible to measure the ability to reduce risk directly related to commercial activity or treasury financing activities

Obligations
The obligations that derive from the EMIR regulation are applied according which of the above categories a business belongs to. In particular:

Financial counterparties are obliged to:

  • adhere to clearing procedures consisting of undergoing the clearing of OTC negotiated derivatives contracts through central counterparties, which belong to a class of derivatives that has been declared to be subject to the obligation
  • apply all the risk mitigation techniques provided by the EMIR regulations, with reference to contracts which have not undergone clearing by central counterparties

Non-financial counterparties are obliged to:

  • assess whether any OTC derivative activity is above the clearing threshold
  • apply all risk mitigation techniques to combat risk with reference to contracts that do not undergo the clearing process through a central counterparty

The qualified non-financial counterparties are obliged to:

  • notify Consob and ESMA if they exceed or return to within threshold limits
  • carry out clearing procedures for contracts subject to the obligation and also those concluded after exceeding the threshold limit
  • apply all mitigation techniques to combat risk, with reference to contracts that do not undergo the clearing process through a central counterparty

The EMIR has also introduced the obligation to report derivatives contracts to a trade repository which is authorised or recognised by ESMA. This applies to the central counterparties and to the subjects belonging to each one of the above-mentioned categories.

Read also

Eni Trading & Shipping: activities, products and services

We operate in the Trading & Shipping through the subsidiary ETS, which handles crude oil and petroleum products, gas and CO2, shipping and vetting.
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