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The International Emissions Trading Association said sales of ‘recycled’ United Nations carbon credits could damage the reputation of the European Union’s emissions-trading market, the world’s largest.

The warning came after Hungary said last week it agreed to sell almost 2 million metric tons of UN credits to an unspecified broker for 4 billion forint ($21 million). The European Commission, the EU’s regulatory arm, said it was “concerned” as the central European country sold credits that had already been turned over to comply in the bloc’s system.

“The Hungarian transaction raises concerns that such credits could reenter the EU emission trading system unknown to market stakeholders, and thereafter be mistaken as compliance grade credits,” IETA said in a statement today.

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