Steel Giant To Make £1 Billion From EU Carbon Trading Scheme
Image via: Tim_Freh on Flickr.com
Steel giant Lakshmi MIttal, owner of ArcelorMittal, is poised to make an estimated £1 Billion this next year thanks to an estimated 14 million allocated emissions permits Arcelor won't need and can now sell on the EU Carbon Trading Market. Some estimate this number could rise as high as 80 million by 2012. But there is a very bright silver lining to this story, if Mittal can part with £1 billion. Could you? Sandbag, an NGO created to monitor emissions trading schemes and work to lower the amount of available permits in the market, has come up with an alternative for Mittal, though it doesn't sound nearly as good as getting one-billlllion-dollars. The alternative? Instead of selling all of those unused emissions permits (and allowing someone else to emit), Mittal could simply cancel or retire the permits. What would this mean? Those permits would not longer be available on the carbon trading market. That means allowable emissions would drop by 14 million. By 2012, if estimates are correct, this would mean 80 million fewer emissions. 80 million emissions is equivalent to the annual emissions of the entire country of Denmark - the host country of the Copenhagen talks this week.
While this might sound like a shot in the dark, or some crazy scheme developed by pie in the sky TreeHuggers, Anna Pearson, Head of Policy at Sandbag makes a good point when it comes to canceling the permits,
"ArcelorMittal received its emissions permits for free and could choose to cancel them; we're calling on them to trade in the windfall profits they could make, for positive action on climate change. European politicians need to sign up to more ambitious targets and tougher limits on pollution in Europe and under the EU Emissions Trading Scheme so that in future, industrial companies like ArcelorMittal actually have to cut their emissions rather than being handed windfall profits."
So Why Does Arcelor Have Too Many Permits?
Part of the "problem" is thanks to the recession. Cutbacks at the plant have decreased output, thus an excess of emissions permits. In addition, Arcelor lobbied very heavily before permits were put out, and some speculate that they may have been given more permits than needed when permits were first handed out. Now, a scheme that was/is intended to reduce emissions is effectively turning into a subsidy scheme for the steel industry.
At this time, Sandbag has sent a letter to Mittal asking for the cancellation of all of those permits. No word on whether Mittal has taken them up on their idea. :Sandbag
More on the Carbon Trading Market
Nature Inc. Shorts: The Carbon Trading Markets: Video
ZeroFootprint: The Ins and Outs of Carbon Trading
Australia Drops Carbon Trading Plans, For Now
UK Schools Set to Join Carbon Trading Scheme