Carbon credits scheme gets Mittal £1-bn bonanza

Carbon credits scheme gets Mittal £1-bn bonanza

 
 

    Lakshmi Mittal, Britain's richest man, stands to benefit from a European scheme to curb global warming. His company ArcelorMittal, the steel business where he is chairman and chief executive, will make gains of about £ 1 billion on "carbon credits" given to it under the European emissions trading scheme (ETS). The scheme grants companies permits to emit CO2 up to a specified "cap". Beyond this they must buy extra permits. An investigation has revealed that ArcelorMittal has been given far more carbon permits than it needs. It has the largest allocation of any organisation in Europe. 

    ArcelorMittal is now free to sell its surplus permits on the market or to hoard them for future use. The latter would allow it to avoid cutting greenhouse gas emissions for years, effectively undermining the point of the scheme. 

    Either way, the company will have gained assets worth around £ 1 billion by 2012. The eventual value could be much greater. Each carbon permit is currently worth about pounds 12.70 but the European Union has said it wants to drive this price above pounds 30. The disclosure comes on the eve of the Copenhagen climate conference, whose main aim is to extend schemes such as ETS into a global system for trading carbon. 

    Anna Pearson, an expert on the ETS who carried out the analysis, said: "Between 2008 and 2012 ArcelorMittal stands to gain assets worth £ 1 billion at today's prices for scant effort. For them, the ETS has been turned into a system for generating free subsidies." ArcelorMittal, which is based in Luxembourg and has more than 80 steel plants around Europe, has confirmed Pearson's figures. The ETS covers 10,000 industrial installations, responsible for 40 of the EU's greenhouse gas emissions. 

    ArcelorMittal was given the right to emit 90 million tonnes of CO2 each year from its plants in the EU from 2008 to 2012. However, the company emitted just 68 million tonnes last year. That was partly due to the recession, but Pearson believes its allocation of 90 million was already too generous. This year ArcelorMittal's emissions are predicted to plummet to 43 million tonnes. 

    A spokesman for the company said: "The extra surplus arose when actual steel production fell way below forecasts because of the unexpected global economic crisis. As the world returns to growth, we expect to use them up." However, Pearson estimates that by 2012 the company will have accumulated surplus permits for 80m tonnes of CO2 __ equivalent to the pollution generated annually by the whole of Denmark. SUNDAY TIMES, LONDON

Gains from European scheme to curb global warming

 
 

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